Ashton Financial Group reports the following financial data: ⚫ Market price per share of common stock = $30.00 ⚫ Earnings per share on common stock = $1.50 Which of the following statements is correct? (a) The price-earnings ratio is 20, meaning a share of common stock was selling for 20 times the amount of earnings per share. (b) The price-earnings ratio is 5.0%, meaning a share of common stock was selling for 5.0% more than the earnings per share. (c) The price-earnings ratio is 15, meaning a share of common stock was selling for 150 times the amount of earnings per share. (d) The market price per share and the earnings per share are not statistically related to each other.

Ashton Financial Group reports the following financial data: ⚫ Market price per share of common stock = $30.00 ⚫ Earnings per share on common stock = $1.50 Which of the following statements is correct? (a) The price-earnings ratio is 20, meaning a share of common stock was selling for 20 times the amount of earnings per share. (b) The price-earnings ratio is 5.0%, meaning a share of common stock was selling for 5.0% more than the earnings per share. (c) The price-earnings ratio is 15, meaning a share of common stock was selling for 150 times the amount of earnings per share. (d) The market price per share and the earnings per share are not statistically related to each other.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 54E: Rebert Inc. showed the following balances for last year: Reberts net income for last year was...

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