Indicate Whether Each of the Following Items Is True or False

question 93

Short Answer

Indicate whether each of the following items is true or false.
_____ a) Many successful corporations do not pay dividends to their stockholders.
_____ b) Careful study of the financial statements will give investors the ability to predict future movements in the market price of a corporation's stock.
_____ c) The price-earnings (P/E) ratio is computed by dividing the market price per share by the earnings per share.
_____ d) As a general rule, the higher the P/E ratio, the greater is the optimism for future growth of the corporation.
_____ e) The number of shares to purchase in order to attain "significant influence" of a corporation can readily be determined from the financial statements.

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Definitions:

Utility Function

A utility function is a mathematical representation of how different goods or bundles of goods satisfy a consumer's needs and preferences.

Cow Feed

A type of feed specifically formulated for the dietary needs of cows, often including grains, hay, and other nutritional components.

Hay

Dried grass, often used as fodder for livestock.

Price

The monetary worth anticipated, necessitated, or provided in compensation for an item.