What is the market value of the firm equity

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Reference no: EM132538077

Consider the table shown below to answer the question posed in part

a. Parts b and c are independent of the given table.

Number of Share

(millions) × Stock Price = Market

Capitalization ($ millions) Callaway Golf (ELY) 94.6 × $ 16.36 = $ 1547.66 Alaska Air Group (ALK) 123.4 × $ 61.96 = $ 7645.86 Yum! Brands (YUM) 332.5 × $ 85.13 = $ 28,305.73 Caterpillar Tractor (CAT) 147.4 × $ 597.63 = $ 88,090.66 Microsoft (MSFT) 7,705.0 × $ 91.27 = $ 703,235.35

a. The price of Yum! Brands stock has risen to $165. What is the market value of the firm's equity if the number of outstanding shares does not change? (Enter your answer in billions rounded to 3 decimal places.)

b. The rating agency has revised Catalytic Concepts' bond rating to AA (use Table 2.2). What interest rate, approximately, would the company now need to pay on its bonds? (Enter your answer as a percent rounded to 1 decimal place.)

Reference no: EM132538077

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