Perez Electronics Corp. has reported that its net income for 2006 is $1,276,351. The firm has 420,000 shares outstanding and a PE ratio of 11.2 times. What is the firm's share price? Round your intermediate and final answer to two decimal places.
A) $34.05
B) $3.68
C) $11.20
D) $36.80

Question

Quizplus · Accepted Answer

The firm's share price is calculated as follows:Share price = Net income / (Number of shares outstanding * PE ratio)= $1,276,351 / (420,000 * 11.2)= $34.05