Suppose the Move It! Exercise Chain Has Revenues of $45

question 148

Essay

Suppose the Move It! exercise chain has revenues of $45 million, accounting costs of $15 million, and currently has issued 10 million shares of stocks selling at $90 each. Compute the price-earning ratio. Show your work. Is this ratio relatively high or low? What might an increase in the price-earnings ratio indicate?

---

Definitions:

Forward Trade

Agreement to exchange currency at some time in the future.

Agreed-upon

Something that has been mutually accepted or concurred by all parties involved.

LIBOR

An average interest rate calculated through submissions of interest rates by major banks in London, used as a benchmark for short-term interest rates around the world.

Eurodollars

U.S. dollars deposited in banks outside the United States, often used for international transactions.