Presented Below Are Selected Data from the Financial Statements of Parade

question 5

Multiple Choice

Presented below are selected data from the financial statements of Parade Corp. $\begin{array}{lrr}&2017&2018\\\text { Net income } & \$ 150,000 & \$ 123,000 \\\text { Weighted average number of common shares outstanding } & 105,000 & 95,000 \\\text { Market price per share of common stock at the end of the year } & \$ 12.00 & \$ 10.00\end{array}$ The price/earnings ratio for 2018 is

• A)0.80 to 1.
• B)1.43 to 1.
• C)8.39 to 1.
• D)12.50 to 1.

---

Definitions:

Long-Run Supply

The total quantity of goods or services that producers are willing and able to supply over a long period, considering all inputs and production costs are variable.

Production

The process of combining various material inputs and immaterial inputs (plans, know-how) in order to make something for consumption (the output).

Supply Curves

Graphical representations showing the relationship between the price of a good and the quantity of that good that suppliers are willing and able to sell, holding other factors constant.

Long Run

A period in economics in which all factors of production and costs are variable, allowing all inputs to be adjusted.