uestion 7(1 point) Calculate the net debt of a firm with a market capitalization (market value...

Question

Question

Answer 1

Answer #1

Solution:

The formula for calculating the Net Debt is

Net Debt = Total Debt - Cash & cash equivalents

As per the information given in the question we have

Total Debt = Market value of Debt = $ 22 Billion ; Cash and cash equivalents = $ 6 Billion

Applying the available information in the formula we have

Net Debt = $ 22 Billion - $ 6 Billion

= $ 16 Billion

Thus the Net Debt of the firm = $ 16 Billion

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Answer 2

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