The Apple Pie Company Had Net Income of $47,500 and Earnings

question 46

Multiple Choice

The Apple Pie Company had net income of $47,500 and earnings per share of $3.17.Apple Pie declared dividends of $2 per share of common stock during 2019.On December 31,2019,the stock had a market price of $18.50 per share.Apple Pie's price/earnings ratio is closest to:

• A)9.25
• B)8.11
• C)5.84
• D)0.17

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Definitions:

Issuing Corporation

A company that offers its shares to the public through the issuance of equity securities in a market.

Convertible Bonds

Bonds that can be converted into a predetermined number of the issuing company's shares, typically at the discretion of the bondholder.

Issuing Corporation's Stock

The process by which a company offers its shares to the public for the first time or issues additional shares in the market.

Par Value

The face value of a bond or stock as stated by the issuing company, unrelated to market value.