Blue Corporation reported earnings per share of common stock at $12 in 2017 and paid dividends of $3 per share.The current market price per share is $102 and the book value per share is $54.Blue Corporation has no preferred stock.How much is the company's price-earnings ratio?

Question

Quizplus · Accepted Answer

The price-earnings ratio can be calculated as follows:
P/E Ratio = Market Price per Share / Earnings per Share
In this case, the earnings per share (EPS) is $12, and the market price per share (MPS) is $102. Therefore:
P/E Ratio = 102 / 12
P/E Ratio = 8.50
So, the company's price-earnings ratio is 8.50. Therefore, the best choice is option C.

Blue Corporation Reported Earnings Per Share of Common Stock at $12