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Baxter & Baxter Has Total Assets of $710,000

question 83

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Baxter & Baxter has total assets of $710,000.There are 45,000 shares of stock outstanding with a market value of $28 a share.The firm has a profit margin of 7.1 percent and a total asset turnover of 1.29.What is the price-earnings ratio?


Definitions:

Internalized

This term generally refers to the absorption of external effects or costs by the decision-maker, often in the context of environmental economics.

Coase Theorem

An economic theory stating that if trade in an externality is possible and there are no transaction costs, bargaining will lead to an efficient outcome regardless of the initial allocation of property rights.

Externalities

Economic side effects or consequences that affect uninvolved third parties; can be positive or negative.

External Costs

Costs generated by a production or consumption activity that are not borne by the producer or consumer but by society at large.

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