Question

A company had a market price of $38.50 per share, earnings per share of $1.75, and dividends per share of $0.90. its price-earnings ratio equals:

Answer 1

Answer: Price-earnings ratio= 22.0

Step-by-step explanation:

Given: A company had a market price of $38.50 per share, earnings per share of $1.75, and dividends per share of $0.90

To find: price-earnings ratio

Required formula: $\text{price-earnings ratio }=\dfrac{\text{ Market Price per Share}}{\text{Earnings Per Share}}$

Then, Price-earnings ratio = $\dfrac{\ 38.50}{\ 1.75}$

⇒Price-earnings ratio = $\dfrac{22}{1}$

Hence, the price-earnings ratio= 22.0