Stout Corporation Had Net Income of $200,000 and Paid Dividends

question 73

Multiple Choice

Stout Corporation had net income of $200,000 and paid dividends to common stockholders of $40,000 in 2013.The weighted average number of shares outstanding in 2013 was 50,000 shares.Stout Corporation's common stock is selling for $75 per share on the New York Stock Exchange. Stout Corporation's price-earnings ratio is

• A)3.8 times.
• B)15 times.
• C)18.8 times.
• D)12 times.

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Definitions:

Cost of Living

The amount of money needed to sustain a certain level of living, including basic expenses such as housing, food, taxes, and healthcare.

Price Level

A measure of the average prices of goods and services in the economy at a specific point in time.

Aggregate Supply Curve

A graphical representation showing the relationship between the total quantity of goods and services that producers in an economy are willing to supply at a given overall price level in a given time period.

Unemployed Resources

Factors of production that are not currently being used to their full potential.