In 2018, Caterpillar Inc. had about 730 million shares outstanding. Their book value was $30.0 per share, and the market price was $87.00 per share. The company’s balance sheet shows that the company...

In 2018, Caterpillar Inc. had about 730 million shares outstanding. Their book value was $30.0 per share, and the market price was $87.00 per share. The company’s balance sheet shows that the company had $30.50 billion of long-term debt, which was currently selling near par value.

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?