A Company Has a Price-Earnings Ratio of 21 and a Price-Cash

question 14

Multiple Choice

A company has a price-earnings ratio of 21 and a price-cash flow ratio of 12.If the earnings per share are $1.75,what is the cash flow per share?

• A) $2.16
• B) $2.51
• C) $3.06
• D) $3.14
• E) $3.50

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Definitions:

Diagnostic Computer

A computer system or software used to read and diagnose faults in various systems, often utilized in automotive, computer, and industrial settings.

Cash Inflows

The total amount of money being transferred into a business, typically from operational, investing, and financing activities.

Rate of Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment’s cost.

Discount Rate

The interest rate used to discount future cash flows to their present value, often used in investment appraisal.