Success Ltd has a price-earnings ratio of 5 and earnings per share of 22 cents. Its issued capital consists of 2,000,000 $1 ordinary shares. The market price per share is:
A)$1.10.
B)$1.00.
C)$4.40.
D)none of the above.

Question

Quizplus · Accepted Answer

The market price per share is calculated as the price-earnings ratio multiplied by the earnings per share. In this case, the price-earnings ratio is 5 and the earnings per share is 22 cents, so the market price per share is 5 x 22 cents = $1.10.

Success Ltd Has a Price-Earnings Ratio of 5 and Earnings