The book debt to value ratio of company C.

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Answer 1

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Chapter 13, Problem 15QP

a)

Summary Introduction

To compute: The book debt to value ratio of company C.

b)

Summary Introduction

To compute: The market debt to value ratio of company C.

c)

Summary Introduction

To discuss: The measure which utilize to compute firm’s cost of capital.

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i n 2018, Caterpillar Inc. had about 654 million shares outstanding. Their book value was $29.0 per share, and the market price was $157.80 per share. The company’s balance sheet shows that the company had $18.80 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 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 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? a. Book debt-to-value ratio b. C. Markeet debt-to-value ratio Measure

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

Answer 2

Question

Chapter 13, Problem 15QP

a)

Summary Introduction

To compute: The book debt to value ratio of company C.

b)

Summary Introduction

To compute: The market debt to value ratio of company C.

c)

Summary Introduction

To discuss: The measure which utilize to compute firm’s cost of capital.

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Answer 3

Question

Chapter 13, Problem 15QP

a)

Summary Introduction

To compute: The book debt to value ratio of company C.

b)

Summary Introduction

To compute: The market debt to value ratio of company C.

c)

Summary Introduction

To discuss: The measure which utilize to compute firm’s cost of capital.

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Answer 4

Question

Chapter 13, Problem 15QP

a)

Summary Introduction

To compute: The book debt to value ratio of company C.

b)

Summary Introduction

To compute: The market debt to value ratio of company C.

c)

Summary Introduction

To discuss: The measure which utilize to compute firm’s cost of capital.

Expert Solution & Answer

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Answer 5

Chapter 13, Problem 15QP

a)

Summary Introduction

To compute: The book debt to value ratio of company C.

b)

Summary Introduction

To compute: The market debt to value ratio of company C.

c)

Summary Introduction

To discuss: The measure which utilize to compute firm’s cost of capital.

Answer 6

Chapter 13, Problem 15QP

a)

Summary Introduction

To compute: The book debt to value ratio of company C.

Answer 7

Chapter 13, Problem 15QP

a)

Summary Introduction

To compute: The book debt to value ratio of company C.

Answer 8

b)

Summary Introduction

To compute: The market debt to value ratio of company C.

Answer 9

b)

Summary Introduction

To compute: The market debt to value ratio of company C.

Answer 10

c)

Summary Introduction

To discuss: The measure which utilize to compute firm’s cost of capital.

Answer 11

c)

Summary Introduction

To discuss: The measure which utilize to compute firm’s cost of capital.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 13 - Prob. 1QP Ch. 13 - Prob. 2QP Ch. 13 - Prob. 3QP Ch. 13 - Prob. 4QP Ch. 13 - Prob. 5QP Ch. 13 - Prob. 6QP Ch. 13 - Prob. 7QP Ch. 13 - Prob. 8QP Ch. 13 - Prob. 9QP Ch. 13 - Prob. 10QP

The book debt to value ratio of company C.

Solution Summary: The author explains that the book debt to value ratio of company C is.61, and the market debt-to-value ratio. Market value is determined by cash flows and estimates, rather than rules of accounting.

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To compute: The book debt to value ratio of company C.

To compute: The market debt to value ratio of company C.

To discuss: The measure which utilize to compute firm’s cost of capital.

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