Longview Corporation Has a Stock Price of $60,has Issued 1,000,000

question 132

Multiple Choice

Longview Corporation has a stock price of $60,has issued 1,000,000 shares of stock,has retained earnings of $3 million dollars,and a dividend yield of 5 percent.The price-earnings ratio for Longview stock is

• A)20,which is high compared to historical standards of the market.
• B)20,which is low compared to historical standards of the market.
• C)10,which is low compared to historical standards of the market.
• D)10,which is high compared to historical standards of the market.

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Definitions:

Marginal Cost

The increase in cost resulting from the production of one additional unit of a good or service.

Firm's ATC

The average total cost for a firm, calculated by dividing the total costs by the quantity of output produced.

Sales

Sales refer to the transactions where goods or services are exchanged for money, reflecting the revenue generating activities of a business.

Implicit Costs

The opportunity costs that are not directly paid for in cash but represent the loss of alternative benefits when resources are used for a particular purpose.