The Price-Earnings Ratio Is Calculated by the Closing Price Per

question 63

Multiple Choice

The price-earnings ratio is calculated by the closing price per share of stock divided by:

• A)Quarterly earnings per share
• B)Dividend per year
• C)Annual earnings per share
• D)Net change
• E)None of these

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Definitions:

Variable Costs

Costs that change in proportion to the level of activity or production volume.

Cost-Volume-Profit Analysis

An accounting method used to determine the effects of changes in costs and volume on a company's profits.

Relevant Range

The range of activity within which the assumptions about fixed and variable cost behavior are valid.

Cost-Volume-Profit Analysis

A management accounting technique used to determine how changes in costs and volume affect a company's operating income and net income.