The following data have been taken from your company's financial records for the current year:

$\begin{array}{lccc}
\text { Earnings per Share }& \$ 10 \
\text { Dividend per Share }&\$ 6 \
\text { Market Price per Share }&\$ 90 \
\text { Book Value per Share }&\$ 70 \
\end{array}$
What is the price-earnings ratio?

Question

The following data have been taken from your company's financial records for the current year:

$\begin{array}{lccc}
\text { Earnings per Share }& \$ 10 \
\text {  Dividend per Share }&\$ 6 \
\text {  Market Price per Share }&\$ 90 \
\text {  Book Value per Share }&\$ 70 \
\end{array}$
 What is the price-earnings ratio?

Quizplus · Accepted Answer

The price-earnings ratio is calculated by dividing the market price per share by the earnings per share: $ \frac{90}{10} = 9.00 $.

The Following Data Have Been Taken from Your Company's Financial