Use the Information for the Question(s)below

question 94

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:

Profitability Ratios

Financial metrics used to assess a business's ability to generate earnings relative to its revenue, assets, equity, or other financial metrics.

PE Ratio

Price-to-Earnings Ratio, a valuation metric that compares the current share price of a company to its per-share earnings.

Dividends Per Share

Dividends per share (DPS) is a financial ratio that indicates how much a company pays out in dividends each year relative to its share price.

Earnings Per Share

A measure of a company's profitability that divides its net earnings available to common shareholders by the outstanding shares.