Luther Corporation's Stock Price Is $39 Per Share and the Company

question 17

Multiple Choice

Luther Corporation's stock price is $39 per share and the company has 20 million shares outstanding.Its excess cash in 2009 is $23.4.Its Debt-to-Enterprise Value Ratio in 2009 is closest to:

• A)0.696
• B)0.37
• C)0.255
• D)0.654

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Definitions:

Perfectly Elastic

Describes a situation where the quantity demanded or supplied responds infinitely at a particular price level.

ΔTR/Δq

The change in total revenue that results from selling one additional unit of a product, essentially another term for marginal revenue.

Marginal Revenue

Earnings obtained from the sale of one more unit of a good or service.

Equilibrium Price

The market price at which the quantity of goods supplied is equal to the quantity of goods demanded, reaching a state of balance.