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9 May, 17:04

In december 2015 , general electric (ge) had a book value of equity of $ 97.1 billion, 9.7 billion shares outstanding, and a market price of $ 29.84 per share. ge also had cash of $ 101.7 billion, and total debt of $ 198.2 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?

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  1. 9 May, 17:49
    0
    The computation is presented below:

    a Market capitalization

    = Number of shares outstanding * market price per share

    = 9.7 billion shares * $29.84 per share

    = $289.448 billion

    Market to book ratio is

    Market to book ratio = (Market price per share) : (book value per share)

    = $289.448 : $97.1

    = 2.98

    b. The book debt-equity ratio is

    = Debt : book equity

    = $198.2 : 97.1

    = 2.04

    The market debt-equity ratio

    = Debt : market equity

    = $198.2 : 289.448

    = 0.68

    c. The enterprise value equals to

    = Market capitalization + Total debt - cash

    = $289.448 + $198.2 - $101.7

    = $385.948 billion
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