P2-19 (similar to) December 2015. General Electric (GE) had a book value of equilty of 6 3 bilion 0.5 bilion shares outstanding and a market price of $32.92 per the GE also had cash of $100.7 bilion, and total debito 53011 bilion What was 's market capitalization? What was Ge's market-to-book rio? b. What was GE's book debt equity ratio? What was GE's marketdeblequity to? c. What was GE's enterprise valu? .. What was GE's market capitalisation? GEs market capitalization was $bition (Round to one decimal place)

Answer a.

Market Capitalization = Number of Shares * Market Price per share
Market Capitalization = 9.50 billion * $32.92
Market Capitalization = $312.7 billion

Market-to-Book Ratio = Market Capitalization / Book Value of Equity
Market-to-Book Ratio = $312.7 billion / $98.3 billion
Market-to-Book Ratio = 3.18

Answer b.

Book Debt-Equity Ratio = Book Value of Debt / Book Value of Equity
Book Debt-Equity Ratio = $201.1 billion / $98.3 billion
Book Debt-Equity Ratio = 2.05

Market Debt-Equity Ratio = Market Value of Debt / Market Value of Equity
Market Debt-Equity Ratio = $201.1 billion / $312.7 billion
Market Debt-Equity Ratio = 0.64

Answer c.

Enterprise Value = Value of Debt + Market Capitalization - Cash Balance
Enterprise Value = $201.1 billion + $312.7 billion - $103.7 billion
Enterprise Value = $410.1 billion