The Ordinary Share of Securetech Corporation Consistently Sells at a Market

question 109

Multiple Choice

The ordinary share of Securetech Corporation consistently sells at a market price of 20 times earnings, i.e., at a p/e ratio of 20. What would be the most likely effect of a 10 cent increase in Securetech's basic EPS?

• A) An increase in market price of approximately 10 cents per share.
• B) An increase in market price of approximately $2 per share.
• C) A reduction in the p/e ratio due to the larger EPS.
• D) Nothing, since market price reflects expectations of future earnings.

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Definitions:

Genetic Pollution

The uncontrolled spread of genetically modified or non-native genes into wild populations, potentially threatening biodiversity and ecosystem stability.

Surface Air Temperature

The temperature of the air near the Earth's surface, which is a critical indicator of climate change and environmental conditions.

Pollutants

Substances that contaminate the environment, causing harm or discomfort to organisms and ecosystems.

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The deterioration of the natural environment through processes such as pollution, deforestation, and climate change.