A Stock That Has a Price of $20 Per Share

question 440

Multiple Choice

A stock that has a price of $20 per share, earnings per share of $2.00, and a dividend of $1.50 will have

• A) a PE ratio of 20/1.50.
• B) a yield of 7.5 percent.
• C) a yield of 12 percent.
• D) a PE ratio of 1.333.

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Definitions:

Operating Cash Flow

Operating cash flow refers to the cash generated by a company's normal business operations, indicating whether a company is able to generate sufficient positive cash flow to maintain and grow its operations.

Variable Costs

Expenses that change in proportion to the amount of goods produced or the extent of services rendered.

Sales Quantity

The total number of units of a product sold in a particular period.

Fixed Costs

Expenses that are constant in total, regardless of changes in the volume of activity within a relevant period.