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30 August, 02:15

A stock has a Price/Earnings Ratio (P/E) of 4.5. Earnings per share (EPS) of these stocks is 8. What is the stock's market value? $14 $25 $36 $81 $40

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  1. 30 August, 03:02
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    The price-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its per-share earnings.

    The Price/Earnings Ratio (P/E Ratio) can be calculated as Market Value/Earnings per Share.

    P/E = MV/EPS

    Substituting the values we have:

    4.5 = MV/8

    MV = $36
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