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FINRA Series 7

Category - Series 7

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XYZ Corporation earned $2 per share last year and is selling at $20 per share. If it earns $3 per share this year and its price/earnings ratio stays the same, its price will be:

Explanation

Answer: C - $30. The current P/E is 10. If earnings are $3 and the P/E is still 10, the share price equals $30 ($3 x 10).

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FINRA Series 7

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FINRA Series 7

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