Guidelines (Rules-Of-Thumb) Are Developed From

question 33

Multiple Choice

Guidelines (rules-of-thumb) are developed from:

• A) Industry statistics from the government.
• B) Past experience.
• C) Analysis of competitors.
• D) Relations between financial items.
• E) Dun and Bradstreet.

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Definitions:

Price-earnings Ratio

A valuation metric for companies, calculated by dividing the current market price of a stock by its earnings per share (EPS).

Dividend Yield Ratio

A financial ratio that indicates how much a company pays out in dividends each year relative to its stock price, typically expressed as a percentage.

Earnings per Share

A financial ratio that measures the amount of net income earned per share of common stock. It is an indicator of a company's profitability.

Dividend Payout Ratio

The proportion of earnings a company pays to its shareholders in the form of dividends, expressed as a percentage of the company's total earnings.