Problem 13.15 – Caterpillar Inc.
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
Determine Caterpillar’s book debt-to-value ratio, market debt-to-value ratio, and two measures to find the cost of capital.
Determine Caterpillar’s book debt-to-value ratio, market debt-to-value ratio, and two measures to find the cost of capital.
Determine the relevant figure for the debt ratio and do you need to revise your measure of debt ratio up or down.
Given the cost of capital, the debt-equity ratio, and the interest rate… find the company’s new cost of equity and WACC.
Given steady dividend income, last dividend, and stocks sold… determine Reliable Electric percentage cost of equity.
With the given information on the proposition of going public… calculate the total value and equity of the company.