Alpha Corporation Has a Price of $5 a Share,outstanding Shares

question 117

Multiple Choice

Alpha Corporation has a price of $5 a share,outstanding shares of 2.5 million,retained earnings of $1 million dollars,and a dividend yield of 2 percent.It has a price-earnings ratio which is

• A)high,perhaps indicating that people expect future earnings to rise.
• B)high,perhaps indicating that people expect future earnings to fall.
• C)low,perhaps indicating that people expect future earnings to rise.
• D)low,perhaps indicating that people expect future earnings to fall.

---

Definitions:

Free Merchandise

Products or goods given away at no cost to promote a brand, product, or service.

Premiums

Extra payments required for insurance coverage or additional costs added to the usual price of services or goods, often in exchange for higher quality or added benefits.

Fast Moving Products

Products that are sold quickly and in large volumes, often requiring frequent restocking.

Cognitive Dissonance

The mental discomfort experienced by an individual who holds two or more contradictory beliefs, values, or ideas at the same time.