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Memphic Memphic
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5 years ago
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
Textbook 
Corporate Finance: The Core

Corporate Finance: The Core


Edition: 4th
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EgorGruzdevEgorGruzdev
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5 years ago
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More solutions for this book are available here
D
Explanation:  D) βU =  βE +  βD =   × 1.32 +   × 0 = 1.597895

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Memphic Author
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5 years ago
this is exactly what I needed
hmonier
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Yesterday
Brilliant ツ
courtneyrmcd
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2 hours ago
Thanks
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