This Ratio Uses the Market Price Per Share of the Stock

question 51

Multiple Choice

This ratio uses the market price per share of the stock and the earning per share.

• A) Book value per share
• B) Earnings per share
• C) Capital gain
• D) Net income
• E) Price-earnings ratio

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Definitions:

Common Stock

A type of equity security that represents ownership in a corporation, with holders potentially entitled to dividends and voting rights.

Discount

A reduction in the price of goods or services offered by a seller, often used as a strategy to increase sales or reward customer loyalty.

Building

A fixed structure used for residential, commercial, or industrial purposes, considered a long-term physical asset in accounting.