Use the Following Information to Answer the Question(s)below

question 88

Multiple Choice

Use the following information to answer the question(s) below.
Galt Industries has no debt,total equity capitalization of $600 million,and an equity beta of 1.2.Included in Galt's assets is $90 million in cash and risk-free securities.Assume the risk-free rate is 4% and the market risk premium is 6%.
-Galt's enterprise value is closest to:

• A)$90 million.
• B)$510 million.
• C)$600 million.
• D)$690 million.

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Definitions:

Index Funds

Mutual funds or exchange-traded funds (ETFs) designed to follow certain preset rules so that the fund can track a specified basket of underlying investments.

Managed Mutual Funds

Programs invested in by shareholders that operate with a mix of different investments, all overseen by experienced investment professionals.

Rate of Return

The increase or decrease in the value of an investment during a particular time frame, presented as a percentage of the investment’s original price.

Private Saving

The portion of individuals' or households' income that is not used for consumption or paying taxes, typically used for investment or future spending.