Fancy Flights has 200,000 common shares outstanding, and they are currently trading at $47 per share. Net income is $235,000. What is the Price-to-Earnings Ratio? (Round your answers to two decimal places, X.XX.)

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Quizplus · Accepted Answer

The Price-to-Earnings (P/E) Ratio is calculated as the market price per share divided by the earnings per share (EPS). EPS is calculated as net income divided by the number of shares outstanding. EPS = $235,000 / 200,000 = $1.175. P/E Ratio = $47 / $1.175 = 40.00.

Fancy Flights Has 200,000 Common Shares Outstanding, and They Are