In 2012 Robert Corporation Had Net Income of $250,000 and Paid

question 104

Multiple Choice

In 2012 Robert Corporation had net income of $250,000 and paid dividends to common stockholders of $50,000. They had 50,000 shares of common stock outstanding during the entire year. Robert Corporation's common stock is selling for $50 per share on the New York Stock Exchange. Robert Corporation's price-earnings ratio is

• A) 10 times.
• B) 5 times.
• C) 2 times.
• D) 8 times.

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Definitions:

Regression Coefficient

A value that represents the degree of change of a dependent variable expected from a one-unit change in an independent variable, all else being equal.

Simple Linear Regression

A statistical technique that fits a linear equation to observed data to model the connection between a dependent variable and a single independent variable.

t-test Statistic

A test statistic used to determine if there is a significant difference between the means of two groups.

F-test Statistic

A value derived from an F-test which is used to compare statistical models in terms of variance explained by the models, to determine if the models are significantly different from each other.