What was its market debt-to-value ratio

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In 2015, Caterpillar Inc. had about 653 million shares outstanding. Their book value was $32.3 per share, and the market price was $74.00 per share. The company’s balance sheet shows that the company had $20.20 billion of long-term debt, which was currently selling near par value.

a. What was Caterpillar’s book debt-to-value ratio? Book Value______?

b. What was its market debt-to-value ratio? Market value_______?

c. Which measure should you use to calculate the company’s cost of capital?

Book value or

Market value

Reference no: EM131835420

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