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

question 3

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.If EBIT is 41.2 and tax rate is 35%,its Return on Invested Capital in 2009 is closest to:

• A)0.104
• B)0.064
• C)0.038
• D)0.068

---

Definitions:

Budget Constraint

An economic model that depicts the combination of goods and services an individual, household, or firm can purchase, given their income and prevailing prices.

Leftover Income

The amount of money an individual or household has after all expenses and taxes have been paid; also known as disposable income.

Bundle

A collection or group of goods or services that are considered together as a single combined unit.

Monthly Income

The total amount of income received on a monthly basis from all sources.