Market-value ratios: Perez Electronics Corp. has reported that its net income for 2006 is $1,276,351. The firm has 420,000 shares outstanding and a P-E ratio of 11.2 times. What is the firm'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. So, Share Price = ($1,276,351 / 420,000) * 11.2 = $34.05.

Market-Value Ratios: Perez Electronics Corp