Richards Corporation Had Net Income of $250,000 and Paid Dividends

question 159

Multiple Choice

Richards Corporation had net income of $250,000 and paid dividends to common stockholders of $50,000. It had 50,000 shares of common stock outstanding during the entire year. Richards Corporation's common stock is selling for $35 per share. The price-earnings ratio is

• A) 7 times
• B) 14 times
• C) 2 times
• D) 5 times

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Definitions:

Contingent Reflex

A reflex action that depends on specific conditions or stimuli to occur, rather than happening automatically.

Conditioned Stimulus

A stimulus that initially does not elicit a specific response but comes to do so after being associated with an unconditioned stimulus.

Conventional Structure

A traditional or commonly accepted arrangement, pattern, or organization of something.

Correlated Stimulus

A stimulus that is consistently linked with another, often leading to an expectation of the second when the first is presented.