A fiRm Has 5,000 Shares of Stock Outstanding, Sales of $6,000

question 344

Multiple Choice

A firm has 5,000 shares of stock outstanding, sales of $6,000, net income of $800, a price-earnings ratio of 10, and a book value per share of $.50. What is the market-to-book ratio?

• A) 1.6
• B) 2.4
• C) 3.0
• D) 3.2
• E) 3.6

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Definitions:

Keynesian Economics

An economic theory proposed by John Maynard Keynes, suggesting that government intervention can stabilize economies by managing demand.

Supply-Side

An economic theory that emphasizes the role of production, investment, and innovation in driving economic growth, often advocating for reducing barriers for entrepreneurs and businesses.

Monetarist

An economist who holds the belief that variations in the money supply have major influences on national output in the short run and the price level over longer periods.

Rational Expectations

Rational Expectations is an economic theory suggesting that individuals make decisions based on their rational outlook, available information, and past experiences, accurately forecasting future economic conditions.