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?

Question

Jax Spencer

Business

12 October, 02:22

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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Answers (1)

Know the Answer?

Madelynn Castaneda · Answer 1

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