ABC Has a Net Profit Margin of 3

question 77

Multiple Choice

ABC has a net profit margin of 3.3 percent on sales of $10,000,000. The firm has 50,000 shares outstanding. If the firm's P/E is 19 times, how much is the stock selling for?

• A) $41.72
• B) $34.96
• C) $125.40
• D) $99.16

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Definitions:

Medicare Tax

A federal tax deducted from employees' paychecks to fund the Medicare program, which provides healthcare to seniors.

Federal Withholding

The amount of an employee's pay withheld by the employer and sent directly to the government as partial payment of taxes.

Taxable Income

The amount of an individual's or a corporation's income used to determine how much tax is owed to the government.

Married Filing Jointly

A tax filing status for married couples who choose to combine their income and deductions on a single tax return.