A Company Has Net Income of $3,000,000

question 37

Multiple Choice

A company has net income of $3,000,000.It has 600,000 weighted-average common shares outstanding and a price-earnings ratio of 17.What is the market value per share of this company's stock?

• A)$5
• B)$85
• C)$176,470.58
• D)$84.90
• E)$17

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Definitions:

Period Cost

Costs that are not directly tied to the production process and are instead expensed in the period they are incurred, such as selling, administrative, and other expenses.

Manufacturing Costs

The total expenses involved in making a product, including direct materials, direct labor, and factory overhead.

Absorption Costing

An accounting method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed manufacturing overhead—in the cost of a product.

Misleading

Presenting information in a way that creates a false impression or misconstrues facts, often to deceive.