Alexas Corporation reports the following:
$\begin{array}{|l|l|}
\hline
&\mathbf{2 0 0 5}\
\hline \text { Earnings per share } & \$ 1.80 \
\hline \text { Dividends per share } & \$ 0.72\
\hline \text { Book Value per share-end of year } & \$8.62\
\hline
\end{array}$
-If Price to book value at the end of 2005 equals 1.00, then P/E ratio at end of 2003 equals (pick closest number):

Question

Alexas Corporation reports the following:
 $\begin{array}{|l|l|}
\hline
&\mathbf{2 0 0 5}\
\hline \text { Earnings per share } & \$ 1.80 \
\hline \text { Dividends per share } &  \$ 0.72\
\hline \text { Book Value per share-end of year } &  \$8.62\
\hline
\end{array}$
-If Price to book value at the end of 2005 equals 1.00, then P/E ratio at end of 2003 equals (pick closest number):

Quizplus · Accepted Answer

The price to book value ratio is 1.00, meaning the stock price equals the book value per share, which is $8.62. The P/E ratio is calculated as the stock price divided by earnings per share: $8.62 / $1.80 = 4.79, which is closest to 4.19.

Alexas Corporation Reports the Following -If Price to Book Value at the End of 2005