The Able Company had profit of $47,500 and earnings per share of $3.17 during 20B.On December 31,20B,the shares had a market price of $18.50 per share.What is Able's price/earnings ratio?
A)0.17
B)5.84
C)8.11
D)25.70

Question

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 market price per share is $18.50 and the earnings per share is $3.17, so the price/earnings ratio is $18.50/$3.17 = 5.84.

The Able Company Had Profit of $47,500 and Earnings Per