If Earnings Per Share Is 30c and the Market Price

question 62

Multiple Choice

If earnings per share is 30c and the market price of each share is $6, the price-earnings ratio is:

• A)20:1.
• B)10:1.
• C)5:1.
• D)25:1.

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Definitions:

Tax Benefit

A tax policy that allows certain deductions, credits, or exclusions that ultimately reduce a taxpayer's burden, improving financial efficiency.

Operating Loss Carryforward

A tax provision that allows businesses to apply current year's operating losses to future profits for tax relief.

Taxable Income

Income of an individual or corporation subject to tax by governmental authorities.

Financial Income

Income generated through investments or other financial instruments, distinct from operational or business income.