If Squid Roe Company's P/E Ratio Is 12,which of the Following

question 52

Multiple Choice

If Squid Roe Company's P/E ratio is 12,which of the following statements is correct?

• A)Investors are willing to pay 12 times the current year's earnings per share of stock.
• B)Squid Roe's stockholders earned 12 times the owners' average investment.
• C)Squid Roe's average stockholders' equity is 12 times its earnings.
• D)Squid Roe's net income was 12 times its stockholders' equity.

---

Definitions:

Birthday Cakes

Specialized cakes decorated and made to celebrate a person's birthday.

Boat Tours

Guided excursions on boats or ships designed to provide passengers with leisure, entertainment, and the opportunity to explore waterways and coastal areas.

Fuel

A material that is used to produce energy, especially by combustion, to generate power or as a source of heat.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of goods or services produced, such as rent, salaries, and insurance.