The following data have been taken from your company's financial records for the current year:
$$\begin{array} { | l | r | }
\hline \text { Eanings per Share } & \$ 15 \
\hline \text { Dividend per Share } & \$ 9 \
\hline \text { Market Price per Share } & \$ 120 \
\hline \text { Book Value per Share } & \$ 90 \
\hline
\end{array}$$
What is the price-earnings ratio?

Question

The following data have been taken from your company's financial records for the current year:
$$\begin{array} { | l | r | } 
\hline \text { Eanings per Share } & \$ 15 \
\hline \text { Dividend per Share } & \$ 9 \
\hline \text { Market Price per Share } & \$ 120 \
\hline \text { Book Value per Share } & \$ 90 \
\hline
\end{array}$$
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. In this case, the price-earnings ratio is $120/$15 = 8.0 to 1.

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