The price per share is $25 and the cash flow per share is $6 then the price to cash flow ratio would be ___________?
Correct answer: B. 4.16 times
- A. 0.24 times
- B. 4.16 times
- C. 0.0416
- D. 0.24
Explanation
The price-to-cash-flow ratio is price per share divided by cash flow per share: 25 ÷ 6 = 4.1667, approximately 4.16 times. The figures below one represent the inverse relationship, not the requested ratio.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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