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Suppose that the MC Software Corporation earns a profit of $10 per share. If the prevailing interest rate is 12 percent and the stock is currently selling for $100 per share, what is the current price/earnings ratio? The higher P/E ratio, ceteris paribus: A. the more rare a stock is B. the more investors are willing to spend for a dollar of earnings C. the less debt a corporation owes D. all of the above Alejandro comes to find out that Black Adam Enterprise (BLA) had earnings per share (EPS) of $16.89 and a P/E ratio of 18.21. What would the price of the stock be for Black Adam Enterprise? Want detailed answer with explanation

Suppose that the MC Software Corporation earns a profit of $10 per share. If the prevailing interest rate is 12 percent and the stock is currently selling for $100 per share, what is the current price/earnings ratio? The higher P/E ratio, ceteris paribus: A. the more rare a stock is B. the more investors are willing to spend for a dollar of earnings C. the less debt a corporation owes D. all of the above Alejandro comes to find out that Black Adam Enterprise (BLA) had earnings per share (EPS) of $16.89 and a P/E ratio of 18.21. What would the price of the stock be for Black Adam Enterprise? Want detailed answer with explanation

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Suppose that the MC Software Corporation earns a profit of $10 per share. If the prevailing interest rate is 12 percent and the stock is currently selling for $100 per share, what is the current price/earnings ratio? The higher P/E ratio, ceteris paribus: A. the more rare a stock is B. the more investors are willing to spend for a dollar of earnings C. the less debt a corporation owes D. all of the above Alejandro comes to find out that Black Adam Enterprise (BLA) had earnings per share (EPS) of $16.89 and a P/E ratio of 18.21. What would the price of the stock be for Black Adam Enterprise? Want detailed answer with explanation
Transcribed Image Text:Suppose that the MC Software Corporation earns a profit of $10 per share. If the prevailing interest rate is 12 percent and the stock is currently selling for $100 per share, what is the current price/earnings ratio? The higher P/E ratio, ceteris paribus: A. the more rare a stock is B. the more investors are willing to spend for a dollar of earnings C. the less debt a corporation owes D. all of the above Alejandro comes to find out that Black Adam Enterprise (BLA) had earnings per share (EPS) of $16.89 and a P/E ratio of 18.21. What would the price of the stock be for Black Adam Enterprise? Want detailed answer with explanation
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