What was Caterpillar's book debt-to-value ratio?

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Capital Structure. In 2015, Caterpillar Inc. had about 582 million shares outstanding. Their book value was $27.30 per share, and the market price was $71.50 per share. The company’s balance sheet shows that the company had $25.2 billion of long-term debt, which was currently selling near par value.

Capital Structure. In 2015, Caterpillar Inc. had about 582 million shares outstanding. Their book value was $27.30 per share, and the market price was $71.50 per share. The company’s balance sheet shows that the company had $25.2 billion of long-term debt, which was currently selling near par value.

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

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

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

Capital Structure. In 2015, Caterpillar Inc. had about 582 million shares outstanding. Their book value was $27.30 per share, and the market price was $71.50 per share. The company’s balance sheet shows that the company had $25.2 billion of long-term debt, which was currently selling near par value.

Capital Structure. In 2015, Caterpillar Inc. had about 582 million shares outstanding. Their book value was $27.30 per share, and the market price was $71.50 per share. The company’s balance sheet shows that the company had $25.2 billion of long-term debt, which was currently selling near par value.

Capital Structure. In 2015, Caterpillar Inc. had about 582 million shares outstanding. Their book value was $27.30 per share, and the market price was $71.50 per share. The company’s balance sheet shows that the company had $25.2 billion of long-term debt, which was currently selling near par value.

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