Data concerning Bouerneuf Company's common stock follow: The price-earnings ratio would be

Question

Data concerning Bouerneuf Company's common stock follow:  The price-earnings ratio would be

Quizplus · Accepted Answer

To calculate the price-earnings ratio (P/E), we need to divide the current market price per share by the earnings per share (EPS).

Market price per share = $30 + $1 = $31

Earnings per share = Net income / Shares outstanding = $6,000,000 / 2,000,000 = $3

P/E ratio = Market price per share / Earnings per share = $31 / $3 = 10.33

Therefore, the closest option is C) 3.0.

Data Concerning Bouerneuf Company's Common Stock Follow: the Price-Earnings