One with the Price-Earnings Ratio Commonly Reported Is That

question 56

Multiple Choice

One with the price-earnings ratio commonly reported is that:

• A) it divides share price,which reflects the present value of future earnings by historical earnings.
• B) it divides share price,which reflects the present value of book value by historical earnings.
• C) it does not take into consideration the present value of future earnings.
• D) it is based on analysts' expectations.

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Definitions:

Economics

The efficient allocation of the scarce means of production toward the satisfaction of human wants.

Input

Resources used in the production process, including labor, materials, machinery, and other factors of production.

Demand

The volume of goods or services that individuals are prepared and financially able to acquire at varying price points during a certain time span.

Perfectly Competitive Labor Market

A theoretical market where numerous employers and employees interact, with no single entity able to influence wages or working conditions.