Question

When Google's share price reached $475 per share, Google had a P/E ratio of about 68 and an estimated market capitalization rate of 11.5%. Google pays no dividends. Approximately what percentage of Google's stock price was represented by PVGO

Answer 1

Answer:

87.2 %

Explanation:

When Google share price reached $475 per share, Google had a P/E ratio of 68

The market capitalization rate is 11.5%

= 11.5/100

= 0.115

The first step is to calculate the earnings per share

= 475/68

= 6.99

The PVGO can be calculated as follows

= 475-(6.99/0.115)

= 475-60.78

= 414.22

= 414.22/475

= 0.872 × 100

= 87.2%