Tutorial topic 1 - 1. On October 2, 2005, Starbucks had a...

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1. On October 2, 2005, Starbucks had a book value of equity of $2bil, 768 mil sharesa outstanding, and a market price of $30 per sahre. Starbucks also had cash of $207 mil, and total debt of $1.4 bil. a. What was Starbucks’ market capitalisation? What was Starbucks’ market-to-book ratio? b. What was Starbucks’ book debt-equity ratio? What was its market debt-equity ratio? c. What was Starbucks’ enterprise value? 2. Consider the following potential events that might have occurred to Mrtinez on Dec 31,2007. For each one, indicate which line items on Martinez’s balance sheet would be affected and by how much. Also indicate the change to Martinez’s book calue of equity if the event occurred. a. Martinez uses $1mil of its available cash to purchase new machinery for its assembly line b. Maritnez issues $3 mil in new long term debt. The company will use the cash it has raised to purchase a new building in several months. c.
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This note was uploaded on 11/11/2011 for the course ECONOMY G123/EC100 taught by Professor Melissa during the Winter '10 term at Rasmussen College.

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Tutorial topic 1 - 1. On October 2, 2005, Starbucks had a...

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