JJ Industries Has a P/E Ratio of 18 and an EPS

question 49

Multiple Choice

JJ Industries has a P/E ratio of 18 and an EPS of $0.93. This means that JJ's stock is currently selling for

• A) $16.74 per share.
• B) $17.07 per share.
• C) $18.00 per share.
• D) $19.35 per share.

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Definitions:

External Costs

Costs generated by a production or consumption activity that are not borne by the producer or consumer but by society at large.

Transaction Costs

Costs associated with the process of buying and selling, including search and information costs, bargaining costs, and enforcement costs.

Coase Theorem

A theory that suggests that if property rights are well-defined and transaction costs are low, externalities will be efficiently resolved through bargaining between parties.

Traffic Congestion

The overcrowding of vehicles in an area, leading to slower speeds, longer trip times, and increased vehicular queuing, often analyzed in urban economics.