Monday 16 November 2015
Thursday 12 November 2015
PE Ratio and Future Growth Example
PE Ratio and Future Growth Example
PE
Ration provides useful information about the future growth or prospectus of the
company, for example a company with high P/E ratio means, it has bright future
prospectus, this concept can be explained by the following example
Example
Ali
& Company reported an EPS for 2013 = .40
Fayaz
& Company reported an EPS 2013 = .60
both companies
quoted price for 2013 was 30
Calculate
P/E ratio and comment?
Solution
P/E
Ratio = Market Price/EPS
ALI
& Co = 30/.4 =75
Fayaz
& Co = 30/.6=50
Fayaz
company has better p/e ratio, it means it has bright future aspect than Ali
& company, this is the reason that despite lower earnings of Fayaz , it
market price is equal to Ali & Co.
Monday 9 November 2015
In agency theory conflict between management and ownership is resolved
In agency theory conflict between management and ownership is resolved
1.
protecting shareholder interest
2.
pursuing self interest by management
3.
balance approach
4. employees satisfactionAnswer is at the end
Answer is 3
In agency theory board of director works in the best interest of
In agency theory board of director works in the best interest of
1.
employees
2.
shareholder
3.
customer
4.
creditor
a
Answer is 2
In agency theory Board of director are agents of
In agency theory Board of director are agents of
1.
Employees
2.
Customer
3.
Shareholder
4.
All of above
answer is give at the end
Answer is 3
Management and ownership are two separate areas under
Management and ownership are two separate areas under
1.
agency theory
2.
stakeholder theory
3.
both
Answer is 1
Who creates public welfare organization
Who creates public welfare organization?
1.
Shareholders
2.
Federal Government
3.
Local Government
4.
both 2 and 3
Answer is 4
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