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

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Definitions:

Offset Side

The side of a transaction that counterbalances the primary entry, ensuring the accounting equation remains balanced.

Increase Side

The side of an account on which increases are recorded, depending on the type of account it could be the debit or credit side.

Right Side

In accounting, refers to the credit side of a ledger account, opposite to the left or debit side, showcasing the sources of funds or increases in liabilities or equity.

Decrease Side

The side of an accounting equation or ledger where decreases in assets, expenses, or dividends are recorded, often the credit side for assets and the debit side for liabilities and equity.