Considering That a Firm Has a PE Ratio of 71

question 24

Multiple Choice

Considering that a firm has a PE ratio of 71.4 and an EPS of 0.1, what is the price of a stock that pays an annual dividend of $1.00?

• A)7.14
• B)71.4
• C)0.714
• D)0.0714

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Definitions:

Create Money

The process by which central banks or monetary authorities increase the money supply.

Deposit Account

A deposit account is a bank account that allows the holder to deposit and withdraw money, often earning interest, including savings accounts, checking accounts, and other transaction accounts.

Liabilities

Financial obligations or debts that a company or individual owes to others, which must be paid back in the future.

Government Securities

Financial instruments issued by the government to borrow money from the public.