Graham Plc Has the Following Information for the Year to 30

question 1

Multiple Choice

Graham plc has the following information for the year to 30 June:
Profit for the year : £4.2m
Ordinary dividend paid : £1.8m
Number of ordinary shares : 18m
Market price at 30 June : £2.90
Calculate price to earnings for Graham Plc as at 30 June.

• A) 1 time
• B) 12 times
• C) 22 times
• D) 29 times

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Definitions:

Economic Profit

A firm's total revenue minus its explicit and implicit costs, representing the additional benefit above the normal rate of return.

Maximize Profits

The process or strategy employed by businesses to achieve the highest possible profit margin.

Marginal Cost Curves

Graphs that depict how the cost of producing one more unit of a good changes as production increases.

Profit Maximizing

The process or strategy of adjusting production and operation levels to achieve the highest possible profit.