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

question 86

Multiple Choice

The following data have been taken from your company's financial records for the current year:
$$\begin{array} { | l | r | } \hline \text { Eanings per Share } & \$ 15 \\\hline \text { Dividend per Share } & \$ 9 \\\hline \text { Market Price per Share } & \$ 120 \\\hline \text { Book Value per Share } & \$ 90 \\\hline\end{array}$$
What is the price-earnings ratio?

• A) 6.0 to 1.
• B) 7.5 to 1.
• C) 8.0 to 1.
• D) 12.5 to 1.

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Definitions:

Cheques

A written, dated, and signed instrument that directs a bank to pay a specific sum of money to the bearer or to a specified person, out of the drawer's bank account.

Clearing

The process of reconciling purchases and sales of various securities, commodities, or currencies and ensuring the correct transfer of funds.

Collection Float

The time period between when a check is deposited into a bank account and the funds become available.

Ledger Balance

represents the total balance in a general ledger account at the beginning of each day, including all transactions that have been posted.