CampUs Ltd has net income of $500,000.It has 125,000 shares outstanding and a market price per share of $115.The price-earnings ratio is:
A) 28.8.
B) 14.7.
C) 92.0.
D) 13.5.
E) 8.0.

Question

Quizplus · Accepted Answer

The price-earnings ratio is calculated by dividing the market price per share by the earnings per share. The earnings per share is calculated by dividing the net income by the number of shares outstanding. In this case, the earnings per share is $500,000 / 125,000 = $4.00. The price-earnings ratio is $115 / $4.00 = 28.8.

CampUs Ltd Has Net Income of $500,000