Question

In: Finance

In December 2015​, General Electric​ (GE) had a book value of equity of $97.8 billion,9.6 billion...

In December 2015​, General Electric​ (GE) had a book value of equity of $97.8 billion,9.6 billion shares​ outstanding, and a market price of $30.27 per share. GE also had cash of $101.6 billion, and total debt of $199.6 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?

Solutions

Expert Solution

1. Market capitalisation=(number of shares X market value per share)=(9.6*30.27)= $290.592 Billions.

B. Market to book ratio= (total market capitalisation / book value)= (290.52/97.8)=2.97 times.

2. Book Debt equity ratio= (debt values / booksbyweight lieu of equity)= (199.6/97.8)=2.040 times.

Market debt equity ratio= (199.6/290.592)=.6868 times.

3. Enterprise value=(market capitalisation + debt -cash)= (199.6+290.592-101.6)= $388.592 Billions.


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