Bread Enterprises had a current ratio of 2.5 on December 31 of the current yea On that date, the company's assets were as follows: Category Cash Accounts receivable, net Inventory Prepaid expenses Equipment, net Total assets Value $100,000 600,000 960,000 25,000 2,200,000 $3,985,000 What impact will an increase in the market price of the company's common stock from $24.50 to $37.20 have on a company's price-earnings ratio? O It will increase the price-earnings ratio O It will decrease the price-earnings ratio O There will be no change O There is not enough information to determine the answer
Bread Enterprises had a current ratio of 2.5 on December 31 of the current yea On that date, the company's assets were as follows: Category Cash Accounts receivable, net Inventory Prepaid expenses Equipment, net Total assets Value $100,000 600,000 960,000 25,000 2,200,000 $3,985,000 What impact will an increase in the market price of the company's common stock from $24.50 to $37.20 have on a company's price-earnings ratio? O It will increase the price-earnings ratio O It will decrease the price-earnings ratio O There will be no change O There is not enough information to determine the answer
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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
Transcribed Image Text:Bread Enterprises had a current ratio of 2.5 on December 31 of the current year.
On that date, the company's assets were as follows:
Category
Cash
Accounts receivable, net
Inventory
Prepaid expenses
Equipment, net
Total assets
Value
$100,000
600,000
960,000
25,000
2,200,000
$3,985,000
What impact will an increase in the market price of the company's common
stock from $24.50 to $37.20 have on a company's price-earnings ratio?
O It will increase the price-earnings ratio
O It will decrease the price-earnings ratio
O There will be no change
O There is not enough information to determine the answer
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