The Following Data Have Been Taken from Your Company's Financial

question 192

Multiple Choice

The following data have been taken from your company's financial records for the current year:
$\begin{array}{|l|r|}\hline \text { Earnings per Share } & \$ 10 \\\hline \text { Dividend per Share } & \$ 6 \\\hline \text { Market Price per Share } & \$ 90 \\\hline \text { Book Value per Share } & \$ 70 \\\hline\end{array}$
What is the price-earnings ratio?

• A) 1.67 to 1.
• B) 7.00 to 1.
• C) 9.00 to 1.
• D) 15.00 to 1.

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Definitions:

Purchase Cost

The total expense incurred to acquire an asset, including the purchase price and associated costs.

360-Day Year

A financial convention or simplification to treat all months as 30 days in duration for the ease of interest calculations and financial analysis.

Commission

A fee or percentage of a sale paid to an employee or agent for facilitating or completing a sale.

Semiannually

Happening semiannually; every six months.