Weightman Corporation's Net Operating Income in Year 2 Was $76,385,net

question 249

Multiple Choice

Weightman Corporation's net operating income in Year 2 was $76,385,net income before taxes was $55,385,and the net income was $36,000.Total common stock was $200,000 at the end of both Year 2 and Year 1.The par value of common stock is $4 per share.The company's total stockholders' equity at the end of Year 2 amounted to $983,000 and at the end of Year 1 to $950,000.The market price per share at the end of Year 2 was $7.92.The company's price-earnings ratio for Year 2 is closest to:

• A) 7.14
• B) 0.58
• C) 5.18
• D) 11.00

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Definitions:

365-Day Year

A calendar method that assumes each year has 365 days for the purpose of interest calculation, ignoring leap years.

Milling Machine

A tool used in machining processes for shaping metal and other solid materials, utilizing rotary cutters to remove material.

Ordinary Simple Interest

Interest calculated only on the principal amount, not on the interest that accrues over time.

360-Day Year

An artificial accounting period used in finance that simplifies the calculation of interest by assuming each month has 30 days, resulting in a calendar year of 360 days.