All categories

4 years ago

The p/e ratio can be interpreted as ""the number of years’ earnings to pay back purchase price"" True or False

Business

1 answer:

ICE Princess25 [194]4 years ago

7 0

Answer:

True

Explanation:

P/E ratio is the price to earning ratio. Investor look into this ratio before investing or buying share of the company as it shows the market value of the shares or demand of the shares in the market. If ratio is higher then investor anticipate the growth of the company´s earning in the future, it also show investors are willing to pay higher price for each dollar earning of the company.

Price earning ratio= $\frac{market\ value\ price\ per\ share}{earning\ per\ share}$

You might be interested in

In class, we discussed the differences between a contribution income statement versus the traditional approach (absorption whi

Irina-Kira [14]

B) Contribution margin

5 0

4 years ago

Lauren plans to deposit $5000 into a bank account at the beginning of next month and $175/month into the same account at the end

Serhud [2]

Answer:

$12,053.86

Explanation:

The easiest way to calculate this is using an excel spreadsheet and the future value function. Using the FV function =FV(rate,nper,pmt)

rate = 3%/12 = 0.25%
nper = 36
pmt = 175

This function will give us the future value of the annuity =FV(0.25%,36,175) = $6,583.60

Now we must add the future value of the original $5,000:

future value = $5,000 x (1 + 0.0025)³⁶ = $5,470.26

total future value = $6,583.60 + $5,470.26 = $12,053.86

if you do not want to use an excel spreadsheet, you can use the following formula:

F = P x ([1 + r]ⁿ - 1 )/r

F = 175 x [(1 + 0.0025)³⁶ - 1] / 0.0025 = $6,583.60

the answer will be the same

3 0

3 years ago

"A customer directs his broker to "Sell 100 shares of ABCD stock and use the proceeds to buy 100 shares of XPDQ stock." This is

lina2011 [118]

Answer: Proceeds transaction

Explanation:

In a proceeds transaction, the broker is involved in two related transactions which are the selling of one stock and the buying of another.

Proceed transactions involve a customer asking their broker to sell their stock and then use the proceeds gained from that sale to buy another stock which is what the customer did when he directed his broker to sell ABCD stock and use the proceeds to buy XPDQ stock.

7 0

3 years ago

A total of 1000 residents in minnesota were asked which season they preferred

Molodets [167]

They all said winter.
Hope this helps!

7 0

3 years ago

As little as _______ percent of privately owned businesses ever move from the start-up stage to the success stage.

melomori [17]

The answer is D: 6% of these businesses

8 0

3 years ago

Read 2 more answers