Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
4th Edition
ISBN: 9780134101477
Author: Berk
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 2, Problem 8P
In early 2012, General Electric (GE) had a book value of equity of $116 billion, 10.6billion shares outstanding, and a market price of $17.00 per share. GE also had cash of $84 billion, and total debt of $410 billion. Three years later, in early 2015, GE had a book value of equity of $128 billion, 10 .0 billion shares outstanding with a market price of $25 per share, cash of $85 billion, and total debt of $302 billion. Over this period, what was the change in GE’s
- a. market capitalization?
- b. market-to-book ratio?
- c. enterprise value?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
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)
Based on the corporate valuation model, the value of Chen Lin Inc.'s operations is $ 897 million. Its balance sheet shows $ 103 million in notes payable, $ 99 million in long-term debt, $ 15 million in preferred stock, $140 million in retained earnings, and $280 million in total common equity. If the company has 27 million shares of stock outstanding, what is the best estimate of its stock price per share?
In December
2018,
General Electric (GE) had a book value of equity of
$51.2
billion,
8.6
billion shares outstanding, and a market price of
$7.92
per share. GE also had cash of
$71.7
billion, and total debt of
$111.3
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
Chapter 2 Solutions
Corporate Finance (4th Edition) (Pearson Series in Finance) - Standalone book
Ch. 2.1 - Prob. 1CCCh. 2.1 - Prob. 2CCCh. 2.2 - Prob. 1CCCh. 2.2 - Prob. 2CCCh. 2.2 - Prob. 3CCCh. 2.3 - What it is the difference between a firms gross...Ch. 2.3 - What is the diluted earnings per share?Ch. 2.4 - Prob. 1CCCh. 2.4 - Prob. 2CCCh. 2.5 - Prob. 1CC
Ch. 2.5 - Prob. 2CCCh. 2.6 - Why is EBITDA used to assess a firms ability to...Ch. 2.6 - Prob. 2CCCh. 2.6 - Prob. 3CCCh. 2.6 - Prob. 4CCCh. 2.7 - Describe the transactions Enron used to increase...Ch. 2.7 - Prob. 2CCCh. 2 - Prob. 1PCh. 2 - Prob. 2PCh. 2 - Consider the following potential events that might...Ch. 2 - What was the change m Global Conglomerates book...Ch. 2 - Find online the annual 10-K report for Costco...Ch. 2 - In early 2012, General Electric (GE) had a book...Ch. 2 - In early-2015, Abercrombie Fitch (ANF) had a book...Ch. 2 - Prob. 10PCh. 2 - Suppose that in 2016, Global launches an...Ch. 2 - Find online the annual 10-K report for Costco...Ch. 2 - Prob. 13PCh. 2 - Prob. 14PCh. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - Suppose a firms tax rate is 35%. a. What effect...Ch. 2 - Prob. 18PCh. 2 - Prob. 19PCh. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - Prob. 22PCh. 2 - Can a firm with positive net income run out of...Ch. 2 - Suppose your firm receives a 5 million order on...Ch. 2 - Nokela Industries purchases a 40 million...Ch. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - Find online the annual 10-K report for Costco...Ch. 2 - Prob. 28PCh. 2 - For fiscal year end 2015, Wal-Mart Stores, Inc....Ch. 2 - Prob. 30PCh. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - See Table 2.5 showing financial statement data and...Ch. 2 - Use the data in Problem 8 to determine the change,...Ch. 2 - You are analyzing the leverage of two firms and...Ch. 2 - Prob. 37PCh. 2 - Prob. 38PCh. 2 - Prob. 39PCh. 2 - Prob. 40PCh. 2 - Prob. 41PCh. 2 - Prob. 42PCh. 2 - Consider a retailing firm with a net profit margin...Ch. 2 - Prob. 44PCh. 2 - Prob. 45P
Additional Business Textbook Solutions
Find more solutions based on key concepts
To assess the risk of investment opportunity from pooled residential mortgages. Introduction: The securities th...
Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
Assume that the bonds are selling for the following amounts:
Microsoft $1,100
GE Capital $1,030
Morgan Stanley ...
Foundations Of Finance
The way in which the debt is viewed as an option portfolio. Introduction: Option is a contract to purchase a fi...
Corporate Finance
(Interest rate determination) You’re looking at some corporate bonds issued by Ford, and you are trying to det...
Foundations of Finance (9th Edition) (Pearson Series in Finance)
In the firm the stock is actively traded in the securities markets need not concern in the diversification and ...
Principles of Managerial Finance (14th Edition) (Pearson Series in Finance)
An annuity provides for 10 consecutive end-of-year payments of 72,000. The average general inflation rate is es...
Contemporary Engineering Economics (6th Edition)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- In December 2018, General Electric (GE) had a book value of equity of $51.5 billion, 8.6 billion shares outstanding, and a market price of $7.93 per share. GE also had cash of $69.9 billion, and total debt of $109.5 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 $enter your response here billion. (Round to one decimal place.) What was GE's market-to-book ratio? GE's market-to-book ratio was enter your response here . (Round to two decimal places.) Part 3 b. What was GE's book debt-equity ratio? GE's book debt-equity ratio was enter your response here . (Round to two decimal places.) Part 4 What was GE's market debt-equity ratio? GE's market debt-equity ratio was enter your response here . (Round to two decimal places.) c. What was GE's enterprise…arrow_forwardIn December 2018, General Electric (GE) had a book value of equity of $51.3 billion, 8.9 billion shares outstanding, and a market price of $7.92 per share. GE also had cash of $69.7 billion, and total debt of $108.9 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 $enter your response here billion. (Round to one decimal place.)arrow_forwardBased on the corporate valuation model, the total corporate value of Chen Lin Inc. is $725 million. Its balance sheet shows $160 million in notes payable, $130 million in long-term debt, $30 million in preferred stock, $140 million in retained earnings, and $280 million in total common equity. If the company has 10 million shares of stock outstanding, what is the best estimate of its stock price per share? a. $40.50 b. $43.00 c. $56.50 d. $43.50 e. $26.50arrow_forward
- JJ industries has $450 million of common equity on its balance sheet, its stock price is $40 per share, and its market value added is $50 million. How many common shares are currently outstanding?arrow_forwardEdelman Engines has $18 billion in total assets of which cash and equivalents total $80 million. Its balance sheet shows $1.8 billion in current liabilities of which the notes payable balance totals $1.05 billion. The firm also has $9.9 billion in long-term debt and $6.3 billion in common equity. It has 300 million shares of common stock outstanding, and its stock price is $26 per share. The firm's EBITDA totals $1.17 billion. Assume the firm's debt is priced at par, so the market value of its debt equals its book value. What are Edelman's market/book and its EV/EBITDA ratios?arrow_forwardThe value of Broadway-Brooks Inc.'s operations is $846 million, based on the corporate valuation model. Its balance sheet shows $70 million in accounts receivable, $40 million in inventory, $40 million in short-term investments that are unrelated to operations, $20 million in accounts payable, $150 million in notes payable, $90 million in long-term debt, $25 million in preferred stock, $150 million in retained earnings, and $300 million in total common equity. If the company has 18 million shares of stock outstanding, what is the best estimate of the stock's price per share? (Round your answer to 2 decimal places.)arrow_forward
- In December 2022, Samar Co. had a share price of AED 50. They had 12 million shares outstanding, a market-to-book ratio of 3. In addition, Samar had AED 200 million debt, AED 40 million in net income and AED 850 million in sales. Calculate P/E ratio and ROE according to Du Pont system.arrow_forwardIn April 2013, General Electric (GE) had a book value of equity of $123.4 billion, 10.3 billion shares outstanding, and a market price of $20.55 per share. GE also had cash of $91.5 billion, and total debt of $394.7 billion. What was GE′s enterprise value? (Round to one decimal place.) I want answer within 2 hrsarrow_forwardIn mid-2015, Microsoft Corporation had a market capitalization of $340 billion, $35 billion in debt, and $96 billion in cash. If its estimated equity beta was 0.87, estimate Microsoft’s beta. please show WRITTEN work!!!!arrow_forward
- Harper Industries has $900 million of common equity on its balance sheet; its stock price is $20 per share; and its market value added (MVA) is $60 million. How many common shares are currently outstanding?arrow_forwardbased on the corporate valuation model , sg telecom total corporate value is $750 million. its. balance sheet shows $100 million notes payable, $200 million long term debt, $40 million common stock, and $160 million of retained earnings with a Wacc of 10%. if the company has 16 million shares of stock outstanding, what is the price per share?arrow_forwardBased on the corporate valuation model, the value of a company's operations is $1,700 million. The company's balance sheet shows $80 million in accounts receivable, $60 million in inventory, and $100 million in short - term investments that are unrelated to operations. The balance sheet also shows $90 million in accounts payable, $230 million in notes payable, $700 million in long-term debt, $130 million in preferred stock, $180 million in retained earnings, and $800 million in total common equity. If the company has 40 million shares of stock outstanding, what is the best estimate of the stock's price per share?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
Financial Reporting, Financial Statement Analysis...FinanceISBN:9781285190907Author:James M. Wahlen, Stephen P. Baginski, Mark BradshawPublisher:Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning
Investing For Beginners (Stock Market); Author: Daniel Pronk;https://www.youtube.com/watch?v=6Jkdpgc407M;License: Standard Youtube License