The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2

-If $30 is paid for a share of stock and the earning per share is $3, how long will it take for the firm's earnings to add up to the purchase price?

Question

The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2
 
-If $30 is paid for a share of stock and the earning per share is $3, how long will it take for the firm's earnings to add up to the purchase price?

Quizplus · Accepted Answer

To find out how long it will take for the firm's earnings to add up to the purchase price, you divide the purchase price ($30) by the earnings per share ($3). This gives you 10 years.

The Figure Given Below Shows the Demand [D and D']