Barber Industries reported net income of $32,000, earnings per share of $2, and paid dividends of $3 per share or a total of $3,000.The stock sells for $20 per share.What is the price/earnings ratio?
A)10.00
B)10.67
C)1.50
D)6.67

Question

Quizplus · Accepted Answer

The price/earnings (P/E) ratio is calculated by dividing the market price per share by the earnings per share (EPS). Given the stock sells for $20 per share and the EPS is $2, the P/E ratio is $20 / $2 = 10.00.

Barber Industries Reported Net Income of $32,000, Earnings Per Share