You Are Attempting to Estimate Expected Earnings Per Share for a Major

question 62

Multiple Choice

You are attempting to estimate expected earnings per share for a major stock market series.You have determined an appropriate estimate for sales per share.Which of the following methods can be used to estimate the profit margin?

• A) Base the estimate on recent trends of net profit margins.
• B) Estimate the net before tax (NBT) profit margin along with a tax estimate.
• C) Incorporate an estimate an operating profit margin, defined as earnings before interest, taxes, and depreciation.
• D) All of the above methods are appropriate.
• E) None of the above methods are appropriate.

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Definitions:

Enterprise Union

An organization representing workers within a single company or enterprise rather than across multiple workplaces or sectors.

Single Company

Pertaining to a business or organization that operates independently, without affiliations or connections to other companies within its sector.

Socialist Market Economy

An economic system where the production and distribution of goods occur within the framework of both the market economy and socialism, often featuring state ownership of key industries.

Economic System

The framework through which a society allocates resources and distributes goods and services among its population.