You Are Attempting to Estimate Expected Earnings Per Share for a Major

question 62

Multiple Choice

You are attempting to estimate expected earnings per share for a major stock market series.You have determined an appropriate estimate for sales per share.Which of the following methods can be used to estimate the profit margin?

• A) Base the estimate on recent trends of net profit margins.
• B) Estimate the net before tax (NBT) profit margin along with a tax estimate.
• C) Incorporate an estimate an operating profit margin, defined as earnings before interest, taxes, and depreciation.
• D) All of the above methods are appropriate.
• E) None of the above methods are appropriate.

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