The P/E ratio (price-to-earnings ratio) of a company's stock is the ratio of the price of the stock to the company's earnings (or profits) per share of stock, both measured in dollars. Find the P/E ratio of a stock that sells for $17.01 and has an earnings of $0.73 per share.

Question

Mathematics

Evelin Browning

13 May, 14:40

The P/E ratio (price-to-earnings ratio) of a company's stock is the ratio of the price of the stock to the company's earnings (or profits) per share of stock, both measured in dollars. Find the P/E ratio of a stock that sells for $17.01 and has an earnings of $0.73 per share.

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Spike · Answer 1

The P/E ratio of the company's stock is 23.3.

Step-by-step explanation:

1. Let's review the information given to us to answer the question properly:

Market value of the stock = $ 17.01

Earnings per share of the stock = $ 0.73

2. Find the P/E ratio of the stock.

Let's recall the formula of the P/E ratio:

P/E ratio = Market value of the stock/Earnings per share of the stock

Replacing with the real values, we have:

P/E ratio = 17.01/0.73 = 23.3

The P/E ratio of the company's stock is 23.3.