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5 April, 03:54

Using the information given here, what is the price-earings ratio for DEF Company? (Hint: This is a two-step calculation) (Round your answer to 2 decimal places.)

Income = $270,000

Number of shares outstanding = 45,000

Price per share = $50.40

Book value per share = $5

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  1. 5 April, 06:47
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    Earning per share = 270,000 / 45,000 = $6

    Price earning ratio = 50.40 / 6

    8.4 times

    Explanation:

    Price earning ratio = Market price per share / earnings per share
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