Using the information given here,what is the price-earnings ratio for DEF Company? (Hint: This is a two-step calculation.)
• Income = $180,000
• Number of shares outstanding = 60,000
• Price per share = $30
• Book value per share = $10

Question

Quizplus · Accepted Answer

First, earnings per share needs to be calculated: Earnings/Number of shares outstanding = $180,000/60,000 = $3.00.Then price-earnings ratio can be determined: Price per share/Earnings per share = $30/$3.00 = $10.00.

Using the Information Given Here,what Is the Price-Earnings Ratio for DEF