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2 years ago

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A good indicator of the value of a company is the ratio of the price of its stock to its yearly earnings expressed as dividends.

This ratio is called the Price to Earnings or P/E ratio. If the price of a stock is $36 and it's earnings are $3.00, by how many cents must the earnings decrease in order that the P/E ratio increases by 20%?

1 answer:

gulaghasi [49]2 years ago

3 0

Answer:

4.92 cents

Step-by-step explanation:

The Price to Earnings or P/E is the ratio of the price of its stock to its yearly earnings expressed as dividends.

The price of a stock is $36 and it's earnings are $3.00

This means the price to earnings ratio,

P/E = 36/3 = 6

Let us express this ratio as percentage. This becomes

36/3 ×100 = 1200%

This means the ratio of price to earnings = 1200%

For an increase of 20%, the ratio of price to earnings will be = 1200 + 20 = 1220%.

Let x be the the value of earnings that would increase the ratio by 20%

36/3 × 100 = 1200%

36/x × 100 = 1220℅

3600/x = 1220

x = 3600/1220 = $2.9508

The amount by which the earnings must decrease in order that the P/E ratio increases by 20% will be

$3 - $2.9508 = $0.0492.

Converting to cents, we multiply by 100. It becomes

0.0492×100 = 4.92 cents

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QUESTION 33

The length of the legs of the right triangle are given as,

6 centimeters and 8 centimeters.

The length of the hypotenuse can be found using the Pythagoras Theorem.

${h}^{2} = {6}^{2} + {8}^{2}$

${h}^{2} = 36+ 64$

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Answer: C

QUESTION 34

The triangle has a hypotenuse of length, 55 inches and a leg of 33 inches.

The length of the other leg can be found using the Pythagoras Theorem,

${l}^{2} + {33}^{2} = {55}^{2}$

${l}^{2} = {55}^{2} - {33}^{2}$

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$l = \sqrt{1936}$

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Answer:B

QUESTION 35.

We want to find the distance between,

(2,-1) and (-1,3).

Recall the distance formula,

$d=\sqrt{(x_2-x_1)^2+(y_2-y_1)^2}$

Substitute the values to get,

$d=\sqrt{( - 1-2)^2+(3- - 1)^2}$

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We want to find the distance between,

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We use the distance formula again,

$d=\sqrt{( - 3-2)^2+( - 3- 2)^2}$

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120 + 27.6

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