Zorba's Is a Small Chain of Restaurants Whose Shares Are

question 32

Multiple Choice

Zorba's is a small chain of restaurants whose shares are not publicly traded.The average P/E ratio for similar restaurant chains is 16.5; the P/E ratio for the S&P 500 Index is 15.2.This year's earnings were $1.21 per share and next year's earnings are forecasted at $1.46 per share.A reasonable price for a share of Zorba's shares is [blank].

• A)$24
• B)$20
• C)$18
• D)$16

---

Definitions:

Demographic Transition

A theory describing the transition from high birth and death rates to lower birth and death rates as a country develops from a pre-industrial to an industrialized economic system.

Demographic Transition

A model describing the transformation of birth and death rates from high to low levels in a society over time, typically associated with economic development.

Resource Demand

The requirement for raw materials, labor, and other inputs needed by businesses to produce goods and services.

Operating Costs

Expenses associated with the day-to-day functioning of a business, such as rent, utilities, and payroll.