Please refer to Table 4-2 for the following questions.
Table 4-2
Drummond Company
Balance Sheet

-Based on the information in Table 4-2,and assuming the company's stock price is $50 per share,the P/E ratio is
A) 10.89.
B) 14.33.
C) 24.44.
D) 27.50.

Question

Please refer to Table 4-2 for the following questions.
Table 4-2
Drummond Company
Balance Sheet
 
-Based on the information in Table 4-2,and assuming the company's stock price is $50 per share,the P/E ratio is
A) 10.89. 
B) 14.33. 
C) 24.44. 
D) 27.50.

Quizplus · Accepted Answer

The P/E ratio is calculated by dividing the stock price by the earnings per share. In this case, the stock price is $50 and the earnings per share is $4.58, so the P/E ratio is $50/$4.58 = 10.89.

Please Refer to Table 4-2 for the Following Questions