franklin corporation reported netfranklin corporation reported net income of $45,100 in year 1. the company had 55,000 shares of $14 par value common stock outstanding and a market price of $164 per share. what is franklin's price-earnings ratio? 200 11.7 20.0 134 none of the above. of $45,100 in year 1. the company had 55,000 shares of $14 par value common stock outstanding and a market price of $164 per share. what is franklin's price-earnings ratio? 200 11.7 20.0 134 none of the above.

Starting at $45,100 for the first year. The company had 55,000 shares of common stock outstanding with a par value of $14 and a market price of $164 per share. Franklin's price/earnings ratio would be 200

How to calculate Franklin's price/earnings ratio?

Earnings Per Share = Net Income ÷ Common Shares Outstanding

Earnings per share = $45,000 ÷ 55,000 shares = $0.82

Price Earnings Ratio = Market Price per Share ÷ Earnings per Share

P/E = $164 ÷ $0.82 = 200

What is the current average PE ratio?

The current 10-year P/E for the S&P500 is 27.8. This is 38% above the modern market average of 19.6 and the current P/E standard deviation is 1.0 above the modern average.

What is a good price-earnings ratio?

Many value investors cite an average PER range of 20-25 to get a sense of the market average. Again, similar to golf, the lower his P/E ratio for a company, the better the investment the metric indicates.

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