Use the Information for the Question(s) Below

question 62

Multiple Choice

Use the information for the question(s) below.
Luther Industries has no debt, a total equity capitalization of $20 billion, and a beta of 1.8. Included in Luther's assets are $4 billion in cash and risk-free securities.
-Considering the fact that Luther's cash is risk-free,Luther's unlevered beta is closest to:

• A) 1.90
• B) 2.25
• C) 1.50
• D) 1.45

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Definitions:

Imprinting

A process occurring during a critical period in the development of an organism, in which that organism responds to a stimulus in a manner that will afterward be difficult to modify.

Assimilation

The cognitive process by which an individual incorporates new information or experiences into their existing framework of knowledge or schema.

Embryonic Stage

A critical phase of prenatal development that spans from implantation of the zygote in the uterine wall through the eighth week, where major organs and structures begin to form.

Zygote

A fertilized ovum (egg cell).