Jangles Co

question 70

Multiple Choice

Jangles Co. earned $1.80 per share. Assuming a closing price of $40, the PE ratio is (round to the nearest whole answer) :

• A)7
• B)22
• C)72
• D)20
• E)None of these

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Definitions:

User Cost

The opportunity cost of using a durable good, which includes depreciation and the foregone interest on the funds tied up in owning the good.

Market Rate

The prevailing price or interest rate for goods, services, or securities in a competitive marketplace.

User Cost

The cost of using a good or service, which includes the opportunity cost of not using the asset in an alternative use.

Opportunity Cost

The cost of choosing one option over another, typically represented by the benefits that could have been gained by choosing the alternative.