In November 2009, Perrigo Co. (PRGO) had a share price of $39.20. They had 91.33 million shares outstanding, a market-to-book ratio of 3.76. In addition, PRGO had $845.01 million in outstanding debt, $163.82 million in net income, and cash of $257.09 million. Perrigo's market debt to equity ratio is closest to: A) 0.24 B) 0.50 C) 0.75 D) 0.89
In November 2009, Perrigo Co. (PRGO) had a share price of $39.20. They had 91.33 million shares outstanding, a market-to-book ratio of 3.76. In addition, PRGO had $845.01 million in outstanding debt, $163.82 million in net income, and cash of $257.09 million. Perrigo's market debt to equity ratio is closest to: A) 0.24 B) 0.50 C) 0.75 D) 0.89
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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In November 2009, Perrigo Co. (PRGO) had a share price of $39.20. They had 91.33 million shares outstanding, a market-to-book ratio of 3.76. In addition, PRGO had $845.01 million in outstanding debt, $163.82 million in net income, and cash of $257.09 million.
Perrigo's market debt to equity ratio is closest to:
A) 0.24
B) 0.50
C) 0.75
D) 0.89
Expert Solution
Step 1
Price per share = $39.20
Number of shares = 91.33 million
Market value of equity = Price*Number of shares
= 39.20*91.33
= $3580.136 million
Debt value = $845.01 million
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