The Common Stock of the Burger Hut Is Selling for $16.25

question 120

Multiple Choice

The common stock of The Burger Hut is selling for $16.25 a share.The company has earnings per share of $0.42 and a book value per share of $9.28.What is the market-to-book ratio?

• A)1.58
• B)1.69
• C)1.75
• D)1.87
• E)1.92

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Definitions:

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance.

After-tax Profit

The net income of a company after all taxes have been deducted from revenues.

Industry Life Cycle

A concept describing the stages of growth and development that a sector or industry goes through, from emergence to decline.

Stalwarts

Well-established companies known for their durability, stable earnings, and regular dividend payments.