The Forward Price-Earning Ratio Is Based on

question 42

Multiple Choice

The forward price-earning ratio is based on

• A) the expected earnings over the coming 12 months and predicted share price in the next 12 months.
• B) the earnings in the previous 12 months and predicted share price in the next 12 months.
• C) the expected earnings over the coming 12 months and current share price.
• D) the previous earnings in the past 12 months and the current share price.

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Definitions:

Consolidated Net Income

The total net income of a parent company and its subsidiaries, after inter-company transactions have been eliminated.

Noncontrolling Interests

A portion of equity in a subsidiary not held by the parent company, representing the minority ownership's share of the subsidiary's net assets and income.

Net Income

The total profit of a company after subtracting all expenses from revenues, including taxes and operating expenses.

Domestic Corporations

Companies that are incorporated under the laws of a specific country and operate within that country.