Longview Corporation Has a Stock Price of $50, Has Issued

question 301

Multiple Choice

Longview Corporation has a stock price of $50, has issued 2,000,000 shares of stock, has retained earnings of $4 million dollars, and a dividend yield of 4 percent. The price-earnings ratio for Longview stock is

• A)25, which is high compared to historical standards of the market.
• B)25, which is low compared to historical standards of the market.
• C)12.5, which is low compared to historical standards of the market.
• D)12.5, which is high compared to historical standards of the market.

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Definitions:

Human Behavior

The range of actions and mannerisms exhibited by humans in conjunction with their environment, influenced by culture, attitudes, emotions, and genetics.

Behavioral Economics

A field that combines insights from psychology and economics to investigate how individuals actually make decisions, challenging the assumption of perfectly rational agents.

Gum

A soft, cohesive substance designed for chewing, made from the sap of certain trees or synthesized materials.

Candy

A sweet tasting confection made from sugar and often combined with fruits, chocolate, or nuts.