Calculate the PE Ratio of a Company Whose Stock Price

question 59

Multiple Choice

Calculate the PE ratio of a company whose stock price is $86 and earnings per share is $2.4.

• A)8.3
• B)20.7
• C)35.8
• D)28.3
• E)13.5

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Definitions:

Applied Factory Overhead

The allocation of manufacturing overhead costs to actual production, based on a predetermined rate or formula.

Continuous Process

A production process that operates continuously without interruption to manufacture products or process materials in an unending flow.

Work In Process

The cost of unfinished goods in the manufacturing process at a given time, including labor, material, and overhead.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product and are a significant portion of the production cost.