Day: September 4, 2023

Accounting Multiple Choice Question – 4 September 2023

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Photo by Olya Kobruseva on Pexels.com

Alex plc makes annual profits of £30M before paying interest of £6M and ordinary dividends of £10M.

It has in issue 20M shares of £0.50 each, currently valued on the Stafford stock exchange at £15 each.

What is the company’s price-earnings ratio?

Select ONE answer:

  1. 8.3
  2. 10.0
  3. 12.5
  4. 21.4

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

  1. Not correct
  2. Not correct
  3. Correct – market value per share / EPS (Profit after Interest before tax / Issued Shares) == > £15 / (£30M – £6M / 20M) = 12.5
  4. Not correct

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.