Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
December 2015?, General Electric? (GE) had a book value of equity of $98
December 2015?, General Electric? (GE) had a book value of equity of $98.4 ?billion, 9.2 billion shares? outstanding, and a market price of $32.92 per share. GE also had cash of $101.9 ?billion, and total debt of $196.5 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?
Expert Solution
a) Computation of GE's market capitalization:-
Market capitalization = Number of shares outstanding * Market price per share
= 9.2 * $32.92
= $302.86 billion Or $302.9 billion
Computation of the GE's market-to-book-ratio:-
Market to book ratio = Market capitalization / Book value of equity
= $302.86 / $98.4
= 3.08
b) Computation of the GE's book debt-equity ratio:-
Book debt-equity ratio = Total debt / Book value of equity
= $196.5 / $98.4
= 2.00
Computation of the GE's market debt-equity ratio:-
Market debt-equity ratio = Total debt / Market capitalization
= $196.5 / $302.86
= 0.65
c) Computation of the GE's enterprise value:-
Enterprise value = Market capitalization + Total debt - Cash
= $302.86 + $196.5 - $101.9
= $397.46 billion Or $397.5 billion
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.
