The price-earnings ratio is measured by dividing:

Question

Quizplus · Accepted Answer

The price-earnings ratio (P/E ratio) shows the relationship between a company's stock price and its earnings per share (EPS). It is calculated by dividing the market value per share by the EPS. Therefore, the correct choice is C, which states that the P/E ratio is measured by dividing market value by earnings per share. Choices A, B, and D are incorrect because they do not relate to the P/E ratio calculation.

The Price-Earnings Ratio Is Measured by Dividing