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Blue Company Reported - the Price-Earnings Ratio Per Ordinary Share Is:
A)1

question 39

Multiple Choice

Blue Company reported:  Share price $18 Net profit $3000 Preference dividend $500 Ordinary dividend $1000 Issued ordinary shares 1000 shares \begin{array}{ll}\text { Share price } & \$ 18 \\\text { Net profit } & \$ 3000 \\\text { Preference dividend } & \$ 500 \\\text { Ordinary dividend } & \$ 1000 \\\text { Issued ordinary shares } & 1000 \text { shares }\end{array}
- The price-earnings ratio per ordinary share is:

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Definitions:

Shareholder's Wealth

The value of a company to its shareholders, often measured by the price of its shares multiplied by the number of shares outstanding.

Stock Split

A change in the number of shares outstanding by issuing new shares in proportion to those already owned. All stockholders’ proportionate ownership is maintained, and no economic value is created. Used to keep stock prices within a desirable trading range.

Maximum Cash Dividend

The highest dividend payment a company can make, determined by its current earnings and reserve cash levels, without compromising its financial stability.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.

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