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The Price/earnings Ratio

Question 67

Multiple Choice

The price/earnings ratio:


A) Is calculated by multiplying the market price of a stock by its earnings per share.
B) Is found by dividing the market price of a stock by the firm's total earnings.
C) Is computed by dividing the book value of a stock by the firm's EPS.
D) Is calculated by adding the market price of a stock to the firm's EPS.
E) Is found by dividing the market price of a stock by the firm's EPS.

Correct Answer:

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