If a Stock's P/E Ratio Is 13

question 23

Multiple Choice

If a stock's P/E ratio is 13.5 at a time when earnings are $3 per year,what is the stock's current price?

• A) $4.50
• B) $18.00
• C) $22.22
• D) $40.50

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Definitions:

Trust

Trust is the confidence or belief in the reliability, truth, ability, or strength of someone or something.

Psychological Contract

The unwritten, implicit agreement between an employee and employer outlining mutual expectations, including job responsibilities and benefits.

Self-Directed Teams

Groups in which members work collaboratively on tasks with little to no supervision, often leading and managing themselves.

Enlarged

Increased in size, scope, or scale.