The Following Information Relates to Poblano Company for Last Year

question 166

Multiple Choice

The following information relates to Poblano Company for last year:


-If Dawson Corporation's common stock has a price-earnings ratio of eight, the market price per share (to the nearest dollar) would be:

• A) $125
• B) $56
• C) $72
• D) $68

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Definitions:

MR = MC Rule

The principle that a firm will maximize its profit (or minimize its losses) by producing the output at which marginal revenue and marginal cost are equal, provided product price is equal to or greater than average variable cost.

Pure Competition

A business environment where many small companies sell identical products and there are no barriers to entering or leaving the market, resulting in perfect competition.

Pure Monopoly

A market framework where there is only one provider offering a distinctive product without any closely resembling alternatives.

Increasing Profits

A financial strategy or outcome where a business experiences a growth in net earnings over time.