Home Depot stock is currently selling for $30 per share.Next year's dividend is expected to be $1.00;next year's earnings per share are expected to be $2.14.Home Depot's P/E ratio is:

Question

Quizplus · Accepted Answer

The P/E ratio can be calculated by dividing the current stock price by the earnings per share. Therefore, the P/E ratio for Home Depot would be:

P/E ratio = Stock price / Earnings per share 
P/E ratio = $30 / $2.14 
P/E ratio = 14

Therefore, the best choice is B, with a P/E ratio of 14.

Home Depot Stock Is Currently Selling for $30 Per Share