If the P/E Ratio of a Company's Common Stock Were

question 13

Multiple Choice

If the P/E ratio of a company's common stock were 12, and its earnings were $2.50 per common share:

• A)the market value of the common stock would be $20.83 per share.
• B)the market value of the common stock would be $25.00 per share.
• C)an increase in earnings of $0.20 per share, with no change in the multiple, would result in a market price increase of $2.40 per share.
• D)an increase in earnings of $0.20 per share, with no change in the multiple, would result in a market price increase of $1.67 per share.

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Definitions:

Psychological Disorders

Psychological Disorders are mental disorders characterized by persistent disturbance or dysfunction in behavior, thoughts, or emotions that cause significant distress or impairment.

Unconscious Motives

Drives and desires that influence our behavior without our conscious awareness.

Interactionist

An approach or perspective in sociology and psychology that focuses on how individuals interact with each other and the environment in shaping behavior.

Traits And Genetics

The study of how certain characteristics and behaviors are inherited through genetic transmission from parents to offspring.