If in 2009 Luther Has 10

question 43

Multiple Choice

If in 2009 Luther has 10.2 million shares outstanding and these shares are trading at $16 per share,then using the market value of equity,the debt to equity ratio for Luther in 2009 is closest to:

• A)1.47
• B)1.78
• C)2.31
• D)4.07

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Definitions:

Credit Sales

Sales made by a business where payment is delayed, often part of a strategy to increase sales by offering customers flexibility.

COGS

The cost of goods sold; it represents the direct costs attributable to the production of goods sold in a company.

Inventory Period

The average time an item remains in inventory before being sold, indicating the efficiency of inventory management.

Accounts Payable Period

The average amount of time it takes for a business to pay its invoices from suppliers and creditors.