The Closing Price of a Stock Is Quoted at 22

question 16

Multiple Choice

The closing price of a stock is quoted at 22.87,with a P/E of 26 and a net change of 1.42. Based on this information,which one of the following statements is correct?

• A) The closing price on the previous day was $1.42 higher than today's closing price.
• B) A dealer will buy the stock at $22.87 and sell it at $26 a share.
• C) The stock increased in value between yesterday's close and today's close by $.0142.
• D) The earnings per share are equal to 1/26^th of $22.87.
• E) The earnings per share have increased by $1.42 this year.

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Definitions:

Advertising Expenditure

The amount of money spent on promoting products or services through various media and marketing channels.

Marginal Cost of Production

The cost of producing an additional unit of a good, taking into account both variable and fixed costs.

Price Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good, with elasticity greater than 1 indicating a high responsiveness.

Marginal Cost

The increase in cost resulting from the production of one additional unit of output.