In 2018, Caterpillar Inc. had about 710 million shares outstanding. Their book value was $38.0 per share,and the market price was $85.00 per share. The company's balance sheet shows that the company had$29.50 billion of long-term debt, which was currently selling near par value.a. What was Caterpillar's book debt-to-value ratio? (Do not round intermediate calculations. Enter youranswer as a decimal rounded to 2 decimal places.)b. What was its market debt-to-value ratio? (Do not round intermediate calculations. Enter your answer asa decimal rounded to 2 decimal places.)c. Which measure should you use to calculate the company's cost of capital?a. Book debt-to-value ratiob.C.Markeet debt-to-value ratioMeasure

The debt-to-value ratio is the weight of debt in the total capital of the firm. It is also helpful…

Answered: In 2018, Caterpillar Inc. had about 710…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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In 2018, Caterpillar Inc. had about 658 million shares outstanding. Their book value was $33.0 per share, and the market price was $159.80 per share. The company's balance sheet shows that the company had $14.80 billion of long-term debt, which was currently selling near par value. a. What was Caterpillar's book debt-to-value ratio? (Do not round intermediate calculations. Enter your answer as a decimal rounded to 2 decimal places.) b. What was its market debt-to-value ratio? (Do not round intermediate calculations. Enter your answer as a decimal rounded to 2 decimal places.) c. Which measure should you use to calculate the company's cost of capital?
In December 2015, General Electric (GE) had a book value of equity of $98.7 billion, 9.1 billion shares outstanding, and a market price of $33.62 per share. GE also had cash of $103.3 billion, and total debt of $2011 billion. a. What was GE's market capitalization? What was GE's market-to-book ratio? b. What was GE's book debt-equity ratio? What was GE's market debt-equity ratio? c. What was GE's enterprise value? a. What was GE's market capitalization? GE's market capitalization was $billion. (Round to one decimal place.) What was GE's market-to-book ratio? GE's market-to-book ratio was (Round to two decimal places) b. What was GE's book debt-equity ratio? GE's book debt-equity ratio was What was GE's market debt-equity ratio? GE's market debt-equity ratio was (Round to two decimal places.) (Round to two decimal places)
In December 2015, General Electric (GE) had a book value of equity of $98.7 billion, 9.5 billion shares outstanding. and a market price of $29.78 per share. GE also had cash of $101.6 billion, and total debt of $196.1 billion. a. What was GE's market capitalization? What was GE's market-to-book ratio? b. What was GE's book debt-equity ratio? What was GE's market debt-equity ratio? c. What was GE's enterprise value? a. What was GE's market capitalization? GE's market capitalization was $ billion. (Round to one decimal place.)
Data for Barry Computer Co. and its industry averages follow. The firm's debt is priced at par, so the market value of its debt equals its book value. Since dollars are in thousands, the number of shares is shown in thousands too. Barry Computer Company: Balance Sheet as of December 31, 2021 (in thousands) Accounts payable Other current liabilities $ 144,050 475,365 417,745 $1,037,160 Notes payable to bank Total current liabilities Cash Receivables Inventories Total current assets Net fixed assets Total assets Sales Cost of goods sold Materials Barry Computer Company: Income Statement for Year Ended December 31, 2021 (in thousands) $2,150,000 Labor Heat, light, and power Indirect labor Gross profit Selling expenses General and administrative expenses 403,340 $1,440,500 Depreciation Earnings before interest and taxes (EBIT) Interest expense Earnings before taxes (EBT) Federal and state income taxes (25%) Net Income Earnings per share Price per share on December 31, 2021 Total assets…
Blunderbluss Manufacturing's balance sheets report $270 million in total debt, $83 million in short-term investments, and $55 million in preferred stock. Blunderbluss has 5 million shares of common stock outstanding. A financial analyst estimated that Blunderbuss's value of operations is $940 million. What is the analyst's estimate of the intrinsic stock price per share? Round your answer to the nearest cent.
Data for Barry Computer Co. and its industry averages follow. The firm's debt is priced at par, so the market value of its debt equals its book value. Since dollars are in thousands, number of shares are shown in thousands too. Barry Computer Company: Balance Sheet as of December 31, 2018 (In Thousands) Cash $224,250 Accounts payable $207,000 Receivables 621,000 Other current liabilities 207,000 Inventories 448,500 Notes payable to bank 207,000 Total current assets $1,293,750 Total current liabilities $621,000 Long-term debt $345,000 Net fixed assets 431,250 Common equity (75,900 shares) 759,000 Total assets $1,725,000 Total liabilities and equity $1,725,000 Barry Computer Company:Income Statement for Year Ended December 31, 2018 (In Thousands) Sales $2,300,000 Cost of goods sold Materials $1,035,000 Labor 552,000 Heat, light, and power 161,000 Indirect labor 207,000…
The Stewart Company has $1,295,000 in current assets and $543,900 in current liabilities. Its initial inventory level is $259,000, and it will raise funds as additional notes payable and use them to increase inventory. How much can its short-term debt (notes payable) increase without pushing its current ratio below 2.0? Round your answer to the nearest dollar. $
The current balance sheet of Bramble Inc. reports total assets of $24 million, total liabilities of $6 million, and stockholders' equity of $18 million. Bramble is considering several financing possibilities in order to expand operations. What will be the effect on Bramble's debt to assets ratio if Bramble issues an additional $6 million in stock to finance its expansion? O The debt to assets ratio will decrease from 0.2500(6/24) to 0.2000 (6/30) after the additional stock sale. O The debt to assets ratio will increase from 24 before to 30 after the additional investment. O The additional stock issuance will have no effect on the debt to assets ratio. The debt to assets ratio will decrease from 6/18 before to 6/30 after the additional stock sale.
In 2018, Caterpillar Inc. had about 730 million shares outstanding. Their book value was $30.0 per share, and the market price was $87.00 per share. The company's balance sheet shows that the company had $30.50 billion of long-term debt, which was currently selling near par value. a. What was Caterpillar's book debt-to-value ratio? (Do not round intermediate calculations. Enter your answer as a decimal rounded to 2 decimal places.) b. What was its market debt-to-value ratio? (Do not round intermediate calculations. Enter your answer as a decimal rounded to 2 decimal places.) c. Which measure should you use to calculate the company's cost of capital? а. Book debt-to-value ratio b. Markeet debt-to-value ratio C. Measure
A firm has a long-term debt-equity ratio of 0.3. Shareholders’ equity is $1.05 million. Current assets are $225,000, and the current ratio is 1.8. The only current liabilities are notes payable. What is the total debt ratio? (Round your answer to 2 decimal places.)
(Market value analysis) Lei Materials' balance sheet lists total assets of $1.35 billion, $196 million in current liabilities, $421 million in long-term debt, $733 million in common equity, and 52 million shares of common stock. If Lei's current stock price is $50.89, what is the firm's market-to-book ratio? The market-to-book ratio is (Round to two decimal places.)
In December 2015, General Electric (GE) had a book value of equity of $98 billion, 9.4 billion shares outstanding, and a market price of $31 per share. GE also had cash of $102 billion, and total debt of $199 billion. a. What was GE’s market capitalization? What was GE’s market-to-book ratio? b. What was GE’s book debt-equity ratio? What was GE’s market debt-equity ratio? c. What was GE’s enterprise value? Some balance sheet information is shown below (all values in millions of dollars)

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