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Which of the Following Formulas Calculates Price-Earnings (P/E) Ratio

Question 56

Multiple Choice

Which of the following formulas calculates price-earnings (P/E) ratio?


A) Market price per share ÷ Book value per share
B) Earnings available to common stockholders (EAC) ÷ Number of shares
C) Common dividends ÷ Number of shares
D) Market price per share ÷ Earnings per share
E) Average cost of funds × Invested capital

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