MusicPod's earnings per share ratios were $2.47 and $2.07 respectively for 2015 and 2014. MusicPod's stock was trading at $53.00 and $41.50 per share at the end of 2015 and 2014 respectively. The company paid cash dividends per share of $.85 in 2015 and $.63 in 2014. Total stockholders' equity was $13,572 million and $11,896 million in 2015 and 2014 respectively. The common shares outstanding were approximately 1,782,000 in both 2015 and 2014. MusicPod's price/earnings ratio for 2015 is closest to:

Question

Quizplus · Accepted Answer

The price/earnings ratio is calculated by dividing the stock price by the earnings per share. For 2015, the stock price was $53.00 and the earnings per share were $2.47. Therefore, the price/earnings ratio for 2015 is $53.00 / $2.47 = 21.46, which is closest to 21.5.

MusicPod's Earnings Per Share Ratios Were $2