Future Business Leaders of America (FBLA) Business Calculations Practice Test

To understand why the correct choice is C, let's break down the relevant calculations for the company JKL.

1. **Earnings Per Share (EPS)**: This is calculated by dividing the total earnings by the number of shares outstanding. JKL earned $1 million and has 100,000 shares. Therefore, EPS is:

\[

\text{EPS} = \frac{\text{Total Earnings}}{\text{Total Shares}} = \frac{1,000,000}{100,000} = 10

\]

So, the EPS is indeed $10, which aligns with the correct choice.

2. **Price-to-Earnings (P/E) Ratio**: This ratio is calculated by dividing the market price per share by the EPS. JKL’s shares sell for $50, and the EPS, as we calculated, is $10. The P/E ratio is:

\[

\text{P/E} = \frac{\text{Price per Share}}{\text{EPS}} = \frac{50}{10} = 5

\]

This confirms that the P/E is 5, which is also reflected in the correct answer.

3. **Yield**