In 2020, Caterpillar Incorporated had about 540 million shares outstanding. Their book value was $39.4 per share, and the marketprice was $111.70 per share. The company's balance sheet shows that the company had $28.80 billion of long-term debt, which wascurrently selling near par value.a. What was Caterpillar's book debt-to-value ratio?Note: 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?Note: 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?a. Book debt-to-value ratiob. Markeet debt-to-value ratioc. MeasureMarket value

(a) Therefore, the Caterpillar's book debt-to-value ratio= 0.58 ( Round to two decimal places).…

Answered: In 2020, Caterpillar Incorporated had…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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