​Scenario: Pettijohn Inc -Refer to Scenario: Pettijohn Inc

question 97

Multiple Choice

​Scenario: Pettijohn Inc.The balance sheet and income statement shown below are for Pettijohn Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.​​ $\begin{array}{lr}\text { Income Statement (Millions of } \$ \text { ) } & 2007 \\\text { Net sales } & \$ 58,800.00 \\\text { Operating costs except depr'n } & \$ 54,978.0 \\\text { Depreciation } & \$ 1,029.0 \\\text { Earnings before interest and taxes (EBIT) } & \$ 2,793.0 \\\text { Less interest } & 1,050.0 \\\text { Earnings before taxes (EBT) } & \$ 1,743.0 \\\text { Taxes } & \$ 610.1 \\\text { Net income } & \$ 1,133.0 \\\text { Other data: } & \\\text { Shares outstanding (millions) } & 175.00 \\\text { Common dividends } & \$ 509.83 \\\text { Interest rate on notes payable \& L-T bonds } & 6.25 \% \\\text { Federal plus state income tax rate } & 35 \% \\\text { Year-end stock price } & \$ 77.69\end{array}$
-Refer to Scenario: Pettijohn Inc.What is the firm's P/E ratio?

• A)12.0
• B)12.6
• C)13.2
• D)13.9

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Definitions:

Core Capitalist Country

A country that is at the forefront of capitalism, having well-developed industries, technological advancements, and a significant influence on global economic policies.

Peripheral Capitalist Country

A term used in world-systems theory to describe countries that are less economically developed and often exploited by more developed core countries, mainly focusing on exporting raw materials.

Geopolitical Position

The strategic significance of a country's location on the global stage, in terms of politics, economics, and military strategy.

Economic Development

The process by which a nation improves the economic, political, and social well-being of its people, often through industrial, technological, and infrastructural advancements.