Luther Corporation
Consolidated Balance Sheet
December 31, 2006 and 2005 (in $ millions)

Refer to the balance sheet above. If in 2006 Luther has 10.2 million shares outstanding and these shares are trading at $16 per share, then Luther's market-to-book ratio would be closest to ________.
A) 2.58
B) 0.64
C) 1.29
D) 1.80

Question

Luther Corporation
Consolidated Balance Sheet
December 31, 2006 and 2005 (in $ millions)

Refer to the balance sheet above. If in 2006 Luther has 10.2 million shares outstanding and these shares are trading at $16 per share, then Luther's market-to-book ratio would be closest to ________.
A) 2.58 
B) 0.64 
C) 1.29 
D) 1.80

Quizplus · Accepted Answer

C) MTB = Market Value of Equity / Book Value of Equity
= (10.2 million × 16) / 126.7 = 163.2 / 126.7 = 1.288

Luther Corporation Consolidated Balance Sheet