If a Firm Has 100,000 Shares of Common Stock Outstanding

question 25

Multiple Choice

If a firm has 100,000 shares of common stock outstanding and has just recorded a $45,000 profit,what is its price/earnings ratio if its current share price is $35?

• A) 0.78
• B) 0.45
• C) 14.00
• D) 45.00
• E) 78.00

---

Definitions:

Capital Resources

Economic assets used by businesses to produce goods and services, such as buildings, machinery, and equipment.

Market Economy

An economic system where supply and demand dictate the production, distribution, and pricing of goods and services, with minimal government intervention.

Bankruptcy

A legal process whereby individuals or entities that cannot repay debts to creditors seek relief from some or all of their debts.

Falsely Claimed

Statements or claims made untruthfully or deceitfully, often in legal or financial contexts to gain an advantage.