1. Company X has a P/E ratio of 10 and a stock price of $50 per share. Calculate earnings per share of the company.  

a. $6 per share 

b. $10 per share 

c. $0.20 per share 

d. $5 per share 

 

2. Which of the following formulas regarding earnings to price ratio is true:  

a. EPS/Po = r[1 + (PVGO/Po] 

b. EPS/Po = r[1 - (PVGO/Po)] 

c. EPS/Po = [r + (PVGO/Po)] 

d. EPS/Po =[r + (1+(PVGO/Po)]/r 

 

3. Generally high growth stocks pay:  

a. Low or no dividends 

b. High dividends 

c. Erratic dividends 

d. Both A and C 

 

4. A high proportion of the value a growth stock comes from:  

a. Past dividend payments 

b. Past earnings 

c. PVGO (Present Value of the Growth Opportunities) 

d. Both A and B 

 

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