GEN has 1 million shares outstanding and a P/E ratio of 12. Its earnings per share is $2.00. What is GEN's market capitalization?

Question

Quizplus · Accepted Answer

Market capitalization is calculated as the share price times the number of shares outstanding. The share price can be found by multiplying the P/E ratio by the earnings per share (EPS). Here, the share price is 12 * $2.00 = $24. Therefore, the market capitalization is $24 * 1,000,000 shares = $24,000,000.

GEN Has 1 Million Shares Outstanding and a P/E Ratio