The following information is available for Jase Company: Line Item Description Amount Market price per share of common stock $25.00 Earnings per share on common stock $1.25 Which of the following statements is true? a.The price-earnings ratio is 20 and a share of common stock was selling for 20 times the amount of earnings per share at the end of the year. b.The price-earnings ratio is 10 and a share of common stock was selling for 125 times the amount of earnings per share at the end of the year. c.The market price per share and the earnings per share are not statistically related to each other. d.The price-earnings ratio is 5% and a share of common stock was selling for 5% more than the amount of earnings per share at the end of the year
The following information is available for Jase Company: Line Item Description Amount Market price per share of common stock $25.00 Earnings per share on common stock $1.25 Which of the following statements is true? a.The price-earnings ratio is 20 and a share of common stock was selling for 20 times the amount of earnings per share at the end of the year. b.The price-earnings ratio is 10 and a share of common stock was selling for 125 times the amount of earnings per share at the end of the year. c.The market price per share and the earnings per share are not statistically related to each other. d.The price-earnings ratio is 5% and a share of common stock was selling for 5% more than the amount of earnings per share at the end of the year
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 21E
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The following information is available for Jase Company:
| Line Item Description | Amount |
|---|---|
| Market price per share of common stock | $25.00 |
| Earnings per share on common stock | $1.25 |
Which of the following statements is true?
a.The price-earnings ratio is 20 and a share of common stock was selling for 20 times the amount of earnings per share at the end of the year.
b.The price-earnings ratio is 10 and a share of common stock was selling for 125 times the amount of earnings per share at the end of the year.
c.The market price per share and the earnings per share are not statistically related to each other.
d.The price-earnings ratio is 5% and a share of common stock was selling for 5% more than the amount of earnings per share at the end of the year
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