A firm's earnings per share increased from $10 to $12,dividends increased from $4.00 to $4.80,and the share price increased from $80 to $90.Given this information,it follows that _________.

Question

Quizplus · Accepted Answer

The P/E ratio is calculated as the share price divided by earnings per share. Initially, it was $80/$10 = 8, and then it became $90/$12 = 7.5. Thus, the P/E ratio decreased.

A Firm's Earnings Per Share Increased from $10 to $12,dividends