A Company Has Net Income of $5

question 165

Multiple Choice

A company has net income of $5.6 million and earnings per share of $2.00.Average common stockholders' equity is $32 million.The company's current stock price is $10 per share.What is its Price/Earnings (P/E) ratio?

• A)0.2
• B)5.0
• C)0.175
• D)5.7

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Definitions:

Collective Bargaining Agreement

A written contract between an employer and a labor union representing a group of employees, outlining the terms of employment.

Debtor

A party that owes money to another party.

Rejected

Declined or dismissed, often referring to something that does not meet a certain standard or requirement.

Reorganization

A process aimed at restructuring a company's operations, structures, and finances to increase efficiency and profitability, often used in bankruptcy contexts.