# In June 2007 General Motors (GM) posted a price-earnings ratio of 9.84. Ifthe price of the stock at that time was \$36 per share, which of the followingmust have been true?a. GMâs earnings per share was 3.66.b. GMâs coupon payment was \$35 per year.c. GMâs dividend yield for the year was 26%.d. GMâs revenues that month were \$366 million.

General Motors (GM)

If  the price of the stock at that time was \$36 per share, the true statement is:

a. GM's earnings per share was 3.66.

Explanation:

a) Data and Calculations:

Price-earnings ratio = 9.84

Market price of stock at that time = \$36 per share

Earnings per share = Market price per share/Price-earnings ratio

= \$36/9.84 = 3.659

= \$3.66

Check:

Price-earnings ratio = Market price per share/Earnings per share

= 9.84 (\$36/\$3.66)

## Related Questions

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Explanation:

True or False: Increasing the number of stocks in a portfolio reduces market risk.Consider two stock portfolios. Portfolio B consists of 20 different stocks from firms in different industries. Portfolio A consists of 10 different stocks, also from firms in different industries. The return on Portfolio B is likely to be volatile than that of Portfolio A.

Explanation:

A basic principle of investments is the creation of portfolios (or portfolios) for diversification purposes. At any given time, investors simultaneously hold a set of assets that make up their investment portfolio. A basic principle in finance is that an investor should not place all of his resources in a single asset or in a relatively small number of assets, but in a large number of investment instruments. In this way, the possible bad results in certain assets would be offset by the good results of others. Diversification allows the investor to lower the risk of his portfolio without sacrificing returns or, alternatively, increase the return on his portfolio without increasing his risk. Of course, diversification does not guarantee profits under any circumstances, but it does help to dampen the variability of returns on individual assets.

During the latest year, Sky Inc. had total sales of \$500,000, net income of 30,000, and its year-end total assets were \$250,000. The firm’s total debt to total assets ratio was 0.36. You can assume total debt is the same as total liabilities. What is firm's return on equity (ROE)?

18.75%

Explanation:

Data provided in the question:

Total sales = \$500,000

Net income = \$30,000

Total assets = \$250,000

Debt to total assets ratio = 0.36

Thus,

Total debt = 0.36 × \$250,000

= \$90,000

Shareholders equity = Total assets - Total debt

= \$250,000 - \$90,000

= \$160,000

Now,

Return on equity = Net income ÷ Shareholders Equity

= [ \$30,000 ÷ \$160,000] × 100%

= 18.75%

A common carrier bailee generally would avoid liability for loss of goods entrusted to its care if the goods area. Stolen by an unknown person.b. Negligently destroyed by an employee.c. Destroyed by the derailment of the train carrying them due to railroad employee negligence.d. Improperly packed by the party shipping them

The correct answer is letter "D": Improperly packed by the party shipping them.

Explanation:

Carriers are liable for the loss of goods being transported by them under three scenarios: acts of God (because they are unpredictable), acts of the shipper (negligence of the person providing with the goods being transported), and acts of a public enemy (a country engaging into the war).

In that case, the carrier is likely not to be found liable if the shipping items were incorrectly packaged the sending party.

The following information was available for Paul Company at December 31, 2020: beginning inventory \$90,000; ending inventory \$70,000; cost of goods sold \$968,000; and sales \$1,360,000. Paul’s inventory turnover in 2020 wasa21.5 days.b.26.4 days.c.30.2 days.d.33.8 days.

Option (c) is correct.

Explanation:

Given that,

Beginning inventory = \$90,000;

Ending inventory = \$70,000;

Cost of goods sold = \$968,000

Sales = \$1,360,000

Average inventor:

= (Beginning inventory + Ending inventory) ÷ 2

= (\$90,000 + \$70,000) ÷ 2

= \$160,000 ÷ 2

= \$80,000

Inventory turnover is the ratio of cost of goods sold and average inventory.

Paul’s inventory turnover in 2020:

= Cost of goods sold ÷ Average Inventory

= \$968,000 ÷ \$80,000

= 12.1 times

Days in inventory:

= 365 days ÷ Inventory turnover ratio

= 365 days ÷ 12.1

= 30.16 or 30.2 days

This year, Barney and Betty sold their home (sales price \$750,000; cost \$200,000). All closing costs were paid by the buyer. Barney and Betty owned and lived in their home for 18 months. Assuming no unusual or hardship circumstances apply, how much of the gain is included in gross income