You are trying to choose between two stocks,Widget and Gadget.Widget has a current stock price of $40.00 and earnings per share of $2.00.Gadget has a current stock price of $30.00 and earnings per share of $1.00.Both are in the media industry,and the average P/E ratio for this industry is 12.Use the P/E ratio to determine which stock you anticipate will have higher earnings.
A) Widget
B) Gadget
C) The answer cannot be determined.
D) Widget and Gadget will most likely produce equivalent earnings.
Correct Answer:
Verified
Q20: What is involved in "going public"?
A)Offering goods
Q21: What is the Dow Jones Industrial Average?
A)Thirty
Q22: The _ is a broad market index
Q23: The indexes provide a broad snapshot of
Q24: Review of the _ is important as
Q26: The _ index represents small company stocks.
A)Russell
Q27: Dividend yield _.
A)represents the annual sum of
Q28: _ stocks are underappreciated underdogs,typically having single-digit
Q29: Which item is typically not a consideration
Q30: A _ P/E suggests that investors are
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents