Samir Has Been Following the Information for the Admiral Engines

question 6

Multiple Choice

Samir has been following the information for the Admiral Engines stock on a financial website. He has noticed that the firm's PE has been steadily rising. What might Samir conclude from this result?

• A) Admiral Engines has just issued more shares of common stock.
• B) Admiral Engines is in serious financial trouble.
• C) Investors expect the company's future earnings to grow.
• D) The company has recently increased its dividend.

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Definitions:

Deferred

A term indicating that something has been postponed or delayed, often referring to income, taxes, or expenses.

Inventories

Assets held for sale in the ordinary course of business, or materials that will be used in the production of goods to be sold.

Year 2

Typically refers to the second year of a company's operations or performance being analyzed.

Variable Costing

An accounting method in which variable costs are charged to cost units and fixed costs are treated as period costs and directly charged to the profit and loss account.