Market-value ratios: Perez Electronics Company has reported that its profit for 2006 is $1,276,351. The company has 420,000 shares outstanding and a P-E ratio of 11.2 times. What is the company's share price?

Question

Quizplus · Accepted Answer

The share price can be calculated using the P-E ratio formula: Share Price = (Net Income / Number of Shares) * P-E Ratio. Here, Share Price = ($1,276,351 / 420,000) * 11.2 = $34.05.

Market-Value Ratios: Perez Electronics Company Has Reported That Its Profit