Question

ABC company has $7,600 in sales. The profit margin is 3 percent. There are 5,100 shares of stock outstanding. The market price per share is $1.30. The value of the price-earnings ratio is _________.

Answer 1

Answer:

29.08

Explanation:

Price earning ratio is the relationship between a company's stock price and earning  per share.

The formula for calculating Price earning ratio is:

PER = stock price per share/earnings per share

stock price per share is 1.30  

The earning per share is  calculated as [(7600*.03)/5100] = 0.0447

PER = 1.30/0.0447

=29.08