A Firm Has an ROE of 20% and a Market-To-Book

question 7

Multiple Choice

A firm has an ROE of 20% and a market-to-book ratio of 2.38. Its P/E ratio is ________.

• A) 8.4
• B) 11.9
• C) 17.62
• D) 47.6

Analyze the impact of external factors on labor productivity.

Explain how interest income fits into the broader economic income concept.

Describe market equilibrium processes for capital and land.

Discuss wage determination theory in the context of developing countries.

---

Definitions:

Total Revenue

The gross income a company generates from selling products or offering services, before deducting any costs.

Price Rises

Occurs when the cost of goods or services increases over a period of time, influenced by factors like inflation, supply and demand imbalances, or increased production costs.

Demand Is Elastic

A condition where the quantity demanded of a good or service is sensitive to changes in its price, illustrating a greater than proportional response.

Total Revenue

The total amount of money generated by the sale of goods or services before any costs are subtracted.