The Figure Given Below Shows the Demand Curves [D₁ and D₂]

question 38

Multiple Choice

The figure given below shows the demand curves [D₁ and D₂] and the supply curve [S₁] of capital.Figure 17.1

-If the P/E ratio is equal to 50, it implies that investors in the stock are willing to pay:

• A)$25 for every $2 of the earnings that the company generates during a period.
• B)$100 for every $1 of the earnings that the company generates during a period.
• C)$500 for every $1 of the earnings that the company generates during a period.
• D)$50 for every $1 of the earnings that the company generates during a period.
• E)$5 for every $1 of the earnings that the company generates during a period.