Suppose the Earnings Per Share (EPS) of a Stock Is

question 74

Multiple Choice

Suppose the earnings per share (EPS) of a stock is $2, and the current price/earnings (P/E) ratio is 10. What is the current price of the stock?

• A) $5
• B) $8
• C) $20
• D) $40
• E) $35

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Definitions:

Decision Making

The cognitive process of selecting a course of action from among multiple alternatives, often involving judgment, evaluation, and reasoning.

Consequentialism

A general approach to ethical dilemmas which requires that we consider the consequences our actions will have on relevant people.

Rigid Set

In mathematics, a set whose members adhere to strict criteria or definitions, often used in contrast to more flexible or loosely defined collections.

Consequentialism

An ethical theory that judges whether an act is right or wrong based on its consequences.