This ratio uses the market price per share of the stock and the earning per share.

Name: This ratio uses the market price per share of the stock and the earning per share.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The price-earnings ratio (P/E ratio) is calculated by dividing the market price per share by the earnings per share. It represents the valuation of a company in relation to its earnings and serves as an indicator of how much investors are willing to pay for each dollar of earnings.

This Ratio Uses the Market Price Per Share of the Stock