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Consider the following income statement and other information: Luther Corporation Consolidated Income Statement Year ended December 31 (in $ millions) 2009 2008 Total sales 610.1

Consider the following income statement and other information:

Luther Corporation

Consolidated Income Statement

Year ended December 31 (in $ millions)

2009

2008

Total sales

610.1

578.3

Cost of sales

(500.2)

(481.9)

Gross profit

109.9

96.4

Selling, general, and

administrative expenses

(40.5)

(39.0)

Research and development

(24.6)

(22.8)

Depreciation and amortization

(3.6)

(3.3)

Operating income

41.2

31.3

Other income

Earnings before interest and taxes (EBIT)

41.2

31.3

Interest income (expense)

(25.1)

(15.8)

Pretax

income

16.1

15.5

Taxes

(5.5)

(5.3)

Net income

10.6

10.2

Price per share

$16

$15

Shares outstanding (millions)

10.2

8.0

Stock options outstanding (millions)

0.3

0.2

Stockholders' Equity

126.6

63.6

Total Liabilities and Stockholders' Equity

533.1

386.7

Luther's return on equity (ROE) for the year ending December 31, 2009 is closest to:

A) 2.0%

B) 6.5%

C) 8.4%

D)12.7%

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