A Firm Has Net Income of $22,500 and a Book

question 39

Multiple Choice

A firm has net income of $22,500 and a book value per share of $3.10. The firm has 30,000 shares of stock outstanding and a price-earnings ratio of 15.9. What is the price-book ratio?

• A)1.7
• B)2.4
• C)2.7
• D)3.8
• E)4.3

---

Definitions:

Charter Revoked

A situation where an official document granting rights, privileges, or authority is taken back or annulled by the granting authority.

King William

A title referring to several European monarchs; most commonly recognizes King William III of England, who reigned from 1689-1702, notable for his role in the Glorious Revolution.

Mismanagement

Poor or ineffective management practices that result in a failure to achieve desired outcomes or handle resources responsibly.

Dominion of New England

A short-lived administrative union of English colonies in North America created by King James II in 1686.