A company has earnings per share of $9.90. Its dividend per share is $.65, its market price per share is $126.72, and its book value per share is $103. Its price-earnings ratio equals:

Question

Business

Cailyn Lucero

27 October, 06:11

A company has earnings per share of $9.90. Its dividend per share is $.65, its market price per share is $126.72, and its book value per share is $103. Its price-earnings ratio equals:

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Answers (1)

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Zaiden Dougherty · Answer 1

The P/E ratio is 12.8.

Explanation:

The price earnings ratio or P/E ratio is a ratio that estimates the amount of money that investors are willing to invest in a company for every $1 of that company's earnings. The Price-earnings ratio is calculated by dividing the price per share by the earnings per share and is also used in the valuation of a company and its stock.

The P/E ratio is = Price per share / Earnings per share

P/E ratio = 126.72 / 9.9 = 12.8 times