Question

If the earnings per share of a company is $3.85 and the earnings yield is 2.5%, what is the price per sharE

Answer 1

Answer:

$154

Explanation:

Earnings yield = earnings / price

earnings yield = 0.025

eps = $3.85

0.025 =  $3.85 / price

Price = $154

Answer 2

The price per share is $154

Earning yield = earnings/price

The parameters given in the question

earnings per share= 3.85

earnings yield= 2.5 × 100

= 0.025

3.85= 0.025/price

cross multiply

price= 3.85/0.025

= 154

= $154

Hence the price is $154

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