Per Share Carrying Value on 31 December,current Year $25

question 54

Multiple Choice

Per share
Carrying value on 31 December,current year $25
Quoted market value on 31 December,current year 30
Earnings per share for the current year 6
Dividend per share for the current year 3
The price-earnings ratio of the shares for the current year is:

• A)4.2 to 1.
• B)5 to 1.
• C)8.3 to 1.
• D)10 to 1.

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Definitions:

Excess Return

The return on an investment that exceeds the return on a risk-free asset such as a Treasury bond.

Risk-Free Asset

A secure financial asset offering a promised payoff without any chance of losing money, commonly found in the form of government bonds.

Lithium-Base Grease

A type of lubricant made from lithium soap, used for its high resistance to extreme temperatures and water washout.

Gear Lube

A lubricant specifically formulated for gearboxes and transmissions to protect against wear, reduce friction, and ensure smooth gear changes.