3/29/2021 Assignment Print View Score: 18.81/20 Points 94.05 % https://ezto.mheducation.com/hm.tpx?todo=c15SinglePrintView&singleQuestionNo=1.&postSubmissionView=13252715267896924&wid=1325271620… 1/3 3/29/2021 1. Assignment Print View Award: 1.88 out of 2.50 points Here is a simplified balance sheet for Locust Farming: Current assets Long-term assets Total Locust Farming Balance Sheet ($ in millions) $ 42,527 Current liabilities 46,838 Long-term debt Other liabilities Equity Total $ 89,365 $ 29,752 27,755 14,323 17,535 $ 89,365 Locust has 660 million shares outstanding with a market price of $86 a share. a. Calculate the company’s market value added. (Enter your answers in millions.) b. Calculate the market-to-book ratio. (Round your answer to 2 decimal places.) c. How much value as the company created for its shareholders as a percent of shareholders’ equity, that is, the net capital contributed to the firm by its shareholders? (Enter your answer as a percentage rounded to the nearest whole number.) Here is a simplified balance sheet for Locust Farming: Locust Farming https://ezto.mheducation.com/hm.tpx?todo=c15SinglePrintView&singleQuestionNo=1.&postSubmissionView=13252715267896924&wid=1325271620… 2/3 3/29/2021 Assignment Print View Current assets Long-term assets Total Balance Sheet ($ in millions) $ 42,527 Current liabilities 46,838 Long-term debt Other liabilities Equity Total $ 89,365 $ 29,752 27,755 14,323 17,535 $ 89,365 Locust has 660 million shares outstanding with a market price of $86 a share. a. Calculate the company’s market value added. (Enter your answers in millions.) b. Calculate the market-to-book ratio. (Round your answer to 2 decimal places.) c. How much value as the company created for its shareholders as a percent of shareholders’ equity, that is, the net capital contributed to the firm by its shareholders? (Enter your answer as a percentage rounded to the nearest whole number.) Explanation: a. Market value = 660 million × $86 = $56,760 million Market value added = $56,760 – $17,535 = $39,225 million b. Market value / Book value = $56,760 / $17,535 = 3.24 c. Value added as a multiple of the equity investment is $39,225/$17,535 = 2.24, or equivalently, 224% of the book value of equity. https://ezto.mheducation.com/hm.tpx?todo=c15SinglePrintView&singleQuestionNo=1.&postSubmissionView=13252715267896924&wid=1325271620… 3/3