If a Company's Stock Currently Sells in the Marketplace for $55

question 40

Multiple Choice

If a company's stock currently sells in the marketplace for $55 per share, and the book value of this stock is $25 per share, what is the Price Earnings ratio if the Earnings per Share is $3.00?

• A) 0.12
• B) 0.05
• C) 8.33
• D) 18.33

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Definitions:

Explicit Costs

Directly incurred expenses in the operation of a business, such as wages, rent, and materials.

Entrepreneurial Talent

The unique set of skills, knowledge, and attitudes possessed by individuals that enable them to create, innovate, and manage businesses effectively.

Production Costs

The total expenses incurred in the manufacturing or production of goods, including labor, materials, and overhead.

Opportunity Cost

The amount of other products that must be forgone or sacrificed to produce a unit of a product.