Luther Industries Has a Market Capitalization of $23 Billion,no Debt,and

question 88

Multiple Choice

Luther Industries has a market capitalization of $23 billion,no debt,and $4 billion in cash.If Luther's estimated equity beta is 1.32,then the beta of Luther's underlying business enterprise is closest to:

• A)1.09.
• B)1.32.
• C)1.48.
• D)1.60.

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Definitions:

Depreciation

The reduction in the value of an asset over time, due to wear and tear, age, or obsolescence.

Security Deposit

Funds provided by a tenant to a landlord at the start of a lease as protection against damage or non-payment of rent, usually refundable under certain conditions.

Rental Income

Income received from renting out property, such as real estate or personal property, which must be reported on tax returns and is subject to income tax.

Tax Year

The 12-month period for which tax is calculated. It can be a calendar year or a fiscal year, depending on the taxpayer.