Financial information for Accessories Unlimited includes the following selected data:
What is the company's price-earnings ratio?

Question

Quizplus · Accepted Answer

The price-earnings ratio (P/E ratio) is calculated by dividing the current market price of the stock by the earnings per share (EPS). 
P/E ratio = Market price per share / Earnings per share 
Given data: 
Market price per share = $40 
EPS = $1 
P/E ratio = 40/1 = 40.0 
Therefore, the company's price-earnings ratio is 40.0, and the best choice is B.

Financial Information for Accessories Unlimited Includes the Following Selected Data