The Following Information Is Available for Morgan Corporation ? Which of the Following Statements Is Correct?
A) the Market

question 56

Multiple Choice

The following information is available for Morgan Corporation: $\begin{array}{lr}&2016\\\text { Market price per share of common stock } & \$ 25.00 \\\text { Earnings per share on common stock } & 1.25\end{array}$ ? Which of the following statements is correct?

• A) The price-earnings ratio is 20 and a share of common stock was selling for 20 times the amount of earnings per share at the end of 2016.
• B) The price-earnings ratio is 5.0% and a share of common stock was selling for 5.0% more than the amount of earnings per share at the end of 2016.
• C) The market price per share and the earnings per share are not statistically related to each other.
• D) The price-earnings ratio is 10 and a share of common stock was selling for 125 times the amount of earnings per share at the end of 2016.

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Equipment Rent

The cost incurred by a company for using equipment owned by another entity for a specified period.

Service Contract

An agreement between a customer and a service provider detailing the terms of service delivery, including scope, quality, and responsibilities.

Adjusting Journal Entry

A financial transaction recorded at the closure of an accounting cycle to properly assign earnings and expenses to the corresponding period.

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Carried out or executed a task or function.