Refer to the partial balance sheet above. If on December 31, 2005 Luther has 8 million shares outstanding trading at $15 per share, then what is Luther's market-to-book ratio?

Use the table for the question(s) below.

Luther Corporation
Consolidated Income Statement
Year ended December 31 (in $ millions)
2006 2005
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

Answer: Market-to-book = Market value of equity / Book value of equity
Market-to-book = 8 million × $15 / $63.6 = 1.89