Thomas Publishing Has a Price of $20 a Share,outstanding Shares

question 152

Multiple Choice

Thomas Publishing has a price of $20 a share,outstanding shares of 2.5 million,retained earnings of $1 million dollars,and a dividend yield of 2 percent.It has a price to earnings ratio of

• A)50, which is high by historical standards.
• B)50, which is low by historical standards.
• C)25, which is high by historical standards.
• D)25, which is low by historical standards.

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Definitions:

Purchases Returns and Allowances

Refers to a reduction in the cost of purchases due to items being returned or allowances provided by the seller for damaged or unsatisfactory goods.

Merchandise Inventory

Goods that a company holds for the purpose of sale to customers in the ordinary course of business.

Merchandise Inventory

Goods or products that a company holds for the main purpose of selling them to customers.

Balance Sheet

The balance sheet is a financial statement that provides a snapshot of a company's financial position, listing assets, liabilities, and shareholders' equity at a specific point in time.