Chapter 13 Assignment i Saved 6 Problem 13-15 Capital Structure (LO3) 9.09 polnts In 2018, Caterpillar Inc. had about 656 million shares outstanding. Their book value was $31.0 per share, and the market price was $158.80 per share. The company's balance sheet shows that the company had $16.80 billion of long-term debt, which was currently selling near par value. Skipped a. What was Caterpillar's book debt-to-value ratio? (Do not round intermediate calculations. Enter your answer as a decimal rounded to 2 decimal places.) b. What was its market debt-to-value ratio? (Do not round intermediate calculations. Enter your answer as a decimal rounded to 2 decimal places.) c. Which measure should you use to calculate the company's cost of capital? ebook Hint a. Book debt-to-value ratio Markeet debt-to-value ratio Print Measure References 8 Problem 13-19 Cost of Equity (L04) 9.09 points Bunkhouse Electronics is a recently incorporated firm that makes electronic entertainment systems. Its earnings and dividends have been growing at a rate of 40.0%, and the current dividend yield is 1200%. Its beta is 1.40, the market risk premium is 18.00%, and the risk-free rate is 2.00%. Skipped a. Use the CAPM to estimate the firm's cost of equity. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) eBook Cost of equity 98 Print References b. Now use the constant growth model to estimate the cost of equity. (Do not round intermediate calculations. Enter your answer as a whole percent.) Cost of equity 9% c. Which of the two estimates is more reasonable? O CAPM O Growth model