Benny Is Considering Investing in Larkman,Inc

question 234

Multiple Choice

Benny is considering investing in Larkman,Inc.The current price of Larkman is $62 a share,the after-tax earnings are $37,900,000,and there are 13,000,000 outstanding shares of common stock.What is Larkman's price/earnings ratio?

• A)15.5
• B)21.3
• C)4.77
• D)17.6

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Definitions:

Dividend Growth Rate

The annualized percentage rate of growth of a company's dividend payouts, indicating the company's long-term earnings growth potential and financial health.

Earnings

Net income of a business entity over a set time frame, indicating its financial performance.

Dividends

Distributions from a company's earnings to its shareholders, typically originating from the firm's profits.

Intrinsic Value

The actual value of a company, asset, or currency determined through fundamental analysis without reference to its market value.