At December 31, 2019, Van Beek's price-earnings ratio was 14.6. For 2019, Van Beek's net income was $1,980,000, its earnings per share was $21.00, and its annual dividend per share was $12.00.
What was the per share market price of Van Beek's stock at December 31, 2019?

Question

Quizplus · Accepted Answer

The price-earnings ratio is calculated as the market price per share divided by the earnings per share. Given a P/E ratio of 14.6 and earnings per share of $21.00, the market price per share is 14.6 * $21.00 = $306.60.

At December 31, 2019, Van Beek's Price-Earnings Ratio Was 14