A good indicator of the value of a company is the ratio of the price of its stock to its yearly earnings expressed as dividends. This ratio is called the Price to Earnings or P/E ratio. If the price of a stock is $36 and it's earnings are $3.00, by how many cents must the earnings decrease in order that the P/E ratio increases by 20%?
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Home » Mathematics » A good indicator of the value of a company is the ratio of the price of its stock to its yearly earnings expressed as dividends. This ratio is called the Price to Earnings or P/E ratio. If the price of a stock is $36 and it's earnings are $3.