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

question 66

Multiple Choice

Dooley Corporation had net income of $200,000 and paid dividends to ordinary shareholders of $40,000 in 2011.The weighted average number of shares outstanding in 2011 was 50,000 shares.Dooley Corporation's ordinary shares are selling for $50 per share on the New York Stock Exchange.Dooley Corporation's price-earnings ratio is

• A)3.2 times.
• B)12.5 times.
• C)8 times.
• D)15.6 times.

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Definitions:

Public Warehouse Agreement

A contract between a warehouse owner and a renter specifying the storage, handling, and management of goods in a public warehouse.

Third Party

An external entity involved in a transaction or agreement that is separate from the principal parties.

Factoring Procedures

The financial transaction where a business sells its accounts receivable to a third party to get immediate cash, minus a fee.

Short-term Financing

This refers to financial obligations or loans that are due for repayment within a period of one year or less, often used for managing daily business operations.