A Share of Stock Sells for $20

question 73

Multiple Choice

A share of stock sells for $20.The company has $64 million in earnings and 200 million outstanding shares.The Price/Earnings ratio for the company is closest to:

• A) 62.5.
• B) 200.
• C) 0.31.
• D) 6.4.

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Definitions:

Statement Of Owner's Equity

A financial document showing the changes in the owner's equity of a company over a specific period, including investments, withdrawals, and profits or losses.

Beginning Capital Balance

The beginning capital balance is the amount of capital or equity in a company at the start of an accounting period, before any transactions for the period have been recorded.

Ending Capital Balance

The amount of capital a company or individual has at the end of a financial period.

Withdrawals

Amounts taken out from a business by its owner(s) for personal use, reducing the owner's capital account.