($ in millions) At the end of fiscal 2011 Estée Lauder had 204 million shares ou
ID: 2768500 • Letter: #
Question
($ in millions)
At the end of fiscal 2011 Estée Lauder had 204 million shares outstanding21 with a share price of $50.0. The company’s weighted-average cost of capital was about 8%.
Calculate the market value added. (Enter your answer in millions. Round your answer to 2 decimal places.)
Calculate the market-to-book ratio. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Calculate the economic value added. (Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place.)
Calculate the return on capital. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
The following table gives abbreviated balance sheets and income statements for Estée Lauder Companies.Explanation / Answer
Answer:a Market value = 204 million shares* $50 = $10200 million
Market value added = $10200- 2819 = $7381 million
Answer:b Market value / Book value = $10200 / $2819 = 3.62
Answer:c EVA=NOPAT-(invested capital*WACC)
=(1071*(1-0.3317))-(6499*8%)
=715.75-520
=195.75
Answer:ROC=(667/6499)*100
=10.26%
Answer:d
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