A Company Reported $990,000 in Net Income for the Current

question 174

Short Answer

A company reported $990,000 in net income for the current year.Total weighted-average number of common shares outstanding are equal to 150,000 shares and the year-end market price is $79.20 per common share.Calculate the company's price-earnings ratio.

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Definitions:

Monopoly

A market structure characterized by a single seller, selling a unique product in the market with no close substitutes.

Purely Competitive Industry

An industry characterized by many buyers and sellers, free entry and exit, and a standardized product, leading to firms being price takers.

Monopolist

A market participant that is the sole provider of a good or service, thus controlling the entire market and having the ability to set prices unilaterally.