ComChip Is a Computer Chip Manufacturer Whose Stock Is Selling

question 189

Multiple Choice

ComChip is a computer chip manufacturer whose stock is selling at $50 per share.Next year's net earnings,minus the preferred stock dividends,is estimated to be $200,000.The company currently has 100,000 shares of common stock outstanding.What is the firm's P/E ratio?

• A)50.00
• B)45.80
• C)25.00
• D)27.78

---

Definitions:

Summer Wages

Compensation paid to employees for work performed during the summer season, often applied to temporary or seasonal positions.

Compounded Quarterly

Interest calculation method where interest is added to the principal sum so that each following period's interest is calculated on a growing principal.

Annual Interest

The amount of interest to be paid or earned over a one-year period, usually expressed as a percentage of the principal.

Investing

The act of allocating resources, usually money, in order to generate income or profit.