Using the Information Given Here, What Is the Price-Earnings Ratio

question 106

Multiple Choice

Using the information given here, what is the price-earnings ratio for DEF Company?
• After-tax income = $180,000
• Number of shares outstanding = 60,000
• Price per share = $30
• Book value per share = $10
• Earnings per share = $3.00

• A) $3.00
• B) $4.00
• C) $7.50
• D) $10.00
• E) $20.00

Simplify radical expressions involving variables.

Understand the primary and additional goals of the business planning process.

Comprehend the components and importance of a financial plan within business planning.

Recognize the relationship between business plans and executive decision-making, including bonuses and financing needs.

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Definitions:

Contract Curve

Curve showing all efficient allocations of goods between two consumers, or of two inputs between two production functions.

Utility Possibilities Frontier

Curve showing all efficient allocations of resources measured in terms of the utility levels of two individuals.

Production Possibilities Frontier

Curve showing the combinations of two goods that can be produced with fixed quantities of inputs.

Pareto Optimal

A state of allocation of resources from which it is impossible to reallocate so as to make any one individual or preference criterion better off without making at least one individual or preference criterion worse off.