Question

The P/E ratio (price-to-earnings ratio) of a company's stock is the ratio of the price of the stock to the company's earnings (or profits) per share of stock, both measured←in dollars. Find the P/E ratio of a stock that sells for $23.13 and has an earnings of $0.78 per share.The P/E ratio is___(Type an integer or decimal rounded to two decimal places as needed.)

Answer 1

Given the following question:

P/E ratio:

The share price is 23.13 since the stock sells for 23.13, thats the price.

Earnings per share is 0.78 since the earnings per share are 0.78.

$\begin{gathered} \frac{23.13}{0.78} \\ 23.13\div0.78=29.6538462 \\ \text{ Rounded two decimal places} \\ 3<5 \\ 29.65 \end{gathered}$