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:

Price Elasticity

A measure capturing how demand for a product reacts to adjustments in price.

Linear Demand

A demand relationship shown through a straight line on a graph, indicating a constant relationship between price and quantity demanded.

Demand Schedule

A table that shows the quantity of a good or service that consumers are willing to buy at each price point.

Total Revenue

The total amount of money generated by a business from the sale of its goods or services before any costs or expenses are subtracted.