Question

Smolira Golf has 11,000 shares of common stock outstanding, and the market price for a share of stock at the end of 2019 was $82.

Required:
What is the price-earnings ratio?

Answer 1

Answer:

25.23 times

Explanation:

PE ratio =  Price per share /Earnings per share

Price per share = $82

Earnings per share (EPS)= net income/ shares of common stock

Net Income = 35,753

EPS = 35753/11000 = 3.25

PE Ratio = 82/3.25 = 25.23 Times