A stock with a price-earnings ratio of 11.2 means that the stock is selling for a closing share price that is 11.2 times its latest available net earnings per share.

Question

Quizplus · Accepted Answer

The price-earnings ratio (P/E ratio) is calculated by dividing the market value per share by the earnings per share. Therefore, a P/E ratio of 11.2 means that the stock is being traded at a value that is 11.2 times its latest available net earnings per share.

A Stock with a Price-Earnings Ratio of 11