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3 years ago

When analyzing a price-earnings ratio:_________.

Business

1 answer:

frez [133]3 years ago

7 0

Answer:

B. The higher the price-earnings ratio, the more investors are paying for earnings.

Explanation:

When analyzing a price-earnings ratio the higher the price-earnings ratio, the more investors are paying for earnings.

Price-earning ratio: It is a ratio of stock´s price per share to the company´s earning per share. It is a measure the share price in relative to the total earning by the company per share. Higher price earning ratio shows the higher demand for the share in the market. The investor wants to invest in the company´s share even if they have to pay a higher price per share as they anticipate better earning per share in the future. This ratio also helps in evaluating the performance of the company before investing.

Formula; Price-earning ratio= $\frac{Current\ share\ price}{Earning\ per\ share}$

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An increase in supply for corn is greater in magnitude than the increase in the demand for corn. As a result, the equilibrium pr

V125BC [204]

Answer:

Equilibrium price will DECREASE and equilibrium quantity will INCREASE

Explanation:

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3 years ago

Chevron Phillips (CP) has put into place new laboratory equipment for the production of chemicals; the cost is $1,770,000 instal

inessss [21]

Answer:

Chevron Phillips (CP)

a. The gross income or annual savings is:

= $804,846.

b. The income tax for the 1st year assuming a marginal tax rate of 40% is:

= $131,600.

c. The after-tax cash flow for the 1st year is:

= $559,400.

Explanation:

a) Data and Calculations;

Cost of new laboratory equipment = $1,770,000

Borrowed capital = $849,600 ($1,770,000 * 48%)

Borrowing rate = 13.4%

Borrowing interest expense for the first year = $113,846

Depreciation = $362,000

Taxable income = $329,000

Gross savings = $X

$X = $804,846 ($113,846 + $362,000 + $329,000)

Income tax for the 1st year:

Marginal tax rate = 40%

Taxable income = $329,000

= $131,600 ($329,000 * 40%)

After-tax Cash Flows for the 1st year:

Gross savings = $804,846

Interest expense 113,846

Depreciation 362,000

Taxable income $329,000

Income tax 131,600

Net income $197,400

Cash Flows:

Net income $197,400

Depreciation 362,000

After-tax cash flow $559,400

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3 years ago

If the midlands pencil corporation has issued several different debt securities, an investor would expect the lowest income stre

Dafna1 [17]

If the midlands pencil corporation has issued several different debt securities, an investor would expect the lowest income stream from <u>convertible debentures.</u>

Convertible bonds have many positive attributes for investors, but the main drawback is that investors accept lower interest rates in exchange for these benefits.

Convertible debentures are fixed rate debentures that pay interest but can be converted into a specified number of ordinary shares or shares. Conversion of a bond into equity may occur at certain times during the life of the bond and is generally at the discretion of the bondholder.

Due to this logic, a convertible bond allows the issuer to indirectly sell its common stock at a price higher than its current price. From a buyer's perspective, convertible bonds are attractive because they offer the opportunity to capture the potentially high yields associated with equities, but also the security of bonds.

Learn more about bonds here brainly.com/question/9817093

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1 year ago

A business owned and run by a single individual who has rights to all profits is known as

tankabanditka [31]

The correct answer is choice A.

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3 years ago

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mestny [16]

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