A stock quote shows a last price of 32.13,a P/E of 17,and a net change of −.23.Based on this information,which one of the following statements is correct? A)The closing price on the previous trading day was $.23 lower than today's closing price. B)A dealer can purchase the stock for $.23 less than an investor can. C)The earnings per share decreased by $.23 a share this year. D)The earnings per share have increased by 17 percent this year. E)The earnings per share are equal to 1/17^th of $32.13.

Question

Quizplus · Accepted Answer

The P/E ratio (Price-to-Earnings ratio) is calculated by dividing the market value per share by the earnings per share (EPS). Given a P/E of 17 and a last price of $32.13, it means that the earnings per share are $32.13 divided by 17, which is how the P/E ratio is defined, making option E correct.

A Stock Quote Shows a Last Price of 32