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

question 66

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%.
-The beta on Galt's assets is closest to:

• A) 1.1
• B) 1.2
• C) 1.3
• D) 1.4

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Definitions:

Opiate

A type of narcotic derived from opium used for its pain-relieving properties; often refers to drugs that act on the opioid receptors.

Psychoactive Drug

A chemical substance that changes brain function and results in alterations in perception, mood, consciousness, cognition, or behavior.

GABA

Gamma-Aminobutyric Acid, an inhibitory neurotransmitter in the brain that helps regulate neural activity.

Psychological Addiction

A form of addiction characterized by a perceived need to use a substance or engage in an activity to achieve a sense of satisfaction or to avoid discomfort, without the physiological dependence associated with substance abuse.