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

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Definitions:

Trade-Off

The concept of sacrificing one aspect or feature in order to gain another, often used in discussions of decision-making where competing objectives must be balanced.

Timeliness

The characteristic of being done or occurring at a favorable or useful time, especially in the context of decision-making or business operations.

Accuracy

The degree to which the result of a measurement, calculation, or specification conforms to the correct value or a standard.

Future Event

An occurrence or situation that is expected to happen at a future date, often considered in planning and forecasting.