Rudy's Stock Is Currently Valued at $28

question 44

Multiple Choice

Rudy's stock is currently valued at $28.40 a share.The firm had earnings per share of $1.86 last year and projects earnings of $2.09 a share for next year.What is the trailing twelve month price-earnings ratio?

• A)13.59
• B)14.38
• C)12.84
• D)16.67
• E)15.27

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Definitions:

Financial Liabilities

Obligations owed to another entity, typically involving the future transfer of cash, goods, or services.

Amortised Cost

The amount at which financial assets or liabilities are measured in the balance sheet after the deduction of principal payments and plus or minus the cumulative amortization of any difference between the initial amount recognized and the maturity amount.

Effective Interest Rate

The true cost of borrowing that includes all fees and compounding of interest, expressed as an annual rate.

Fair Value

An approximation of the cost at which a liability or asset might be traded between informed, consenting parties in a fair transaction.