If earnings per share is 85c, dividend per share is 50c, and the market price of each share is $9.35, the price-earnings ratio is:
A)18.7:1.
B)11:1.
C)9:1.
D)5:1.

Question

Quizplus · Accepted Answer

The price-earnings ratio is calculated by dividing the market price per share by the earnings per share.

Price-earnings ratio = Market price per share / Earnings per share

In this case,

Market price per share = $9.35
Earnings per share = 85c = $0.85

Therefore,

Price-earnings ratio = $9.35 / $0.85 = 11

Hence, the answer is B.

If Earnings Per Share Is 85c, Dividend Per Share Is