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:

Inflation Rate

The rate at which prices for a wide range of goods and services go up, causing a decline in how much can be bought with the same amount of money.

Teddy Bears

Soft, plush toys in the form of bears, often given as a comfort object for children and as gifts of affection for holidays or special occasions.

Producer Price Index

An economic indicator that measures the average changes in prices received by domestic producers for their output, which is a signal of future consumer price movements.

Basket of Goods

A selected set of products and services used to track inflation and the cost of living through tools like the Consumer Price Index.