A Company Has Net Income of $3,000,000

question 37

Multiple Choice

A company has net income of $3,000,000.It has 600,000 weighted-average common shares outstanding and a price-earnings ratio of 17.What is the market value per share of this company's stock?

• A)$5
• B)$85
• C)$176,470.58
• D)$84.90
• E)$17

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Definitions:

Income Summary

An account in accounting used to gather all revenue and expenses for a period to calculate net income (or loss).

Owner's Drawings

The amount of cash or other assets withdrawn by the owner from the business for the owner's personal use.

Net Income

The amount of profit earned by a business after all expenses and taxes have been subtracted from total revenue.

IFRS

A global set of accounting principles called International Financial Reporting Standards, formulated by the International Accounting Standards Board (IASB) to steer the compilation of financial statements worldwide.