Tempel Corporation Has Provided the Following Data The Market Price of Common Stock at the End of 2

question 112

Multiple Choice

Tempel Corporation has provided the following data: $\begin{array}{ll}&\text { Year 2 } & \text { Year 1 } \\\text {Common stock, \$4 par value }&\$ 240,000 & \$ 240,000 \\\text { Total stockholders' equity. }&\$ 817,000 & \$ 810,000 \\\text {Net operating income. }&\$ 36,714 & \\\text {Net income before taxes }&\$ 17,714 & \\\text { Net income }&\$ 12,400 &\end{array}$ The market price of common stock at the end of Year 2 was $2.77 per share. The company's price-earnings ratio for Year 2 is closest to:

• A)9.23
• B)0.35
• C)4.54
• D)13.40

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Definitions:

Fallacy of Composition

The erroneous belief or argument that what is true for a part is necessarily true for the whole, or that what holds for individual members of a group must necessarily hold for the group as a whole.

Nearest Exit

The closest point of egress from a building, vehicle, or area, often highlighted as part of safety protocols.

Large Audience

A substantial number of viewers, listeners, or spectators gathered for an event or through a broadcast media platform.

No Free Lunch

A principle asserting that everything has a cost, and nothing valuable can be obtained without effort or exchange.