Exhibit 6-1 Morgan Company Reported the Following Information for the Year

question 12

Multiple Choice

Exhibit 6-1 Morgan Company reported the following information for the year ended December 31, 2010:
$\begin{array}{ll}\text { Net income } & \$ 800,000 \\\text { Preferred dividends declared and paid } & 100,000 \\\text { Common dividends declared and paid } & 160,000 \\\text { Average common shares outstanding } & 140,000 \\\text { Ending market price per share } & 30 \\\text { Net sales } & 7,400,000\end{array}$
- Refer to Exhibit 6-1.Morgan's 2010 price/earnings ratio was

• A)0.17 times
• B)5.25 times
• C)6.00 times
• D)4.67 times

---

Definitions:

Manipulated Variables

Variables in an experiment that are changed or controlled by the researcher to observe their effect on the dependent variable.

Measured Variables

Variables in a study that are quantified or labeled based on empirical observation or experiment.

Independent Variable

The factor in a study that is deliberately changed by the investigator to see how it influences the outcome variable.

Statistically Significant Interaction

An interaction between variables that leads to a difference in outcomes which is unlikely to be due to chance alone, according to statistical analysis.