If a Share of Stock in Skylight Chili Sells for $75

question 121

True/False

If a share of stock in Skylight Chili sells for $75, the retained earnings per share are $5, and the dividend per share is $2, then the price-earnings ratio is 15.

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Definitions:

Average Total

Typically refers to the average total cost, which is the total cost of production divided by the number of goods produced.

Total Variable

Expenses that change in proportion to the activity of a business, such as costs of goods sold, which vary with the level of production or sales volume.

Average Variable Cost

The variable costs of production (costs that change with output level) divided by the quantity of output, indicating the average variable cost per unit.

Producing Purses

Producing purses involves the manufacturing and assembling of various materials to create handbags and similar accessories.