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

$\begin{array}{lccc}
\text { Earnings per Share }& \$ 15 \
\text { Dividend per Share }&\$9 \
\text { Market Price per Share }&\$ 120 \
\text { Book Value per Share }&\$90 \
\end{array}$
What is the price-earnings ratio?

Question

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

$\begin{array}{lccc}
\text { Earnings per Share }& \$ 15 \
\text {  Dividend per Share }&\$9 \
\text {  Market Price per Share }&\$ 120 \
\text {  Book Value per Share }&\$90 \
\end{array}$
 What is the price-earnings ratio?

Quizplus · Accepted Answer

The p/e ratio is calculated by dividing the market price per share by earnings per share. In this case, the p/e ratio would be 120/15 = 8.0 to 1. Therefore, the correct answer is C.

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