A stock has a Price/Earnings Ratio (P/E) of 4.5. Earnings per share (EPS) of these stocks is 8. What is the stock's market value? $14 $25 $36 $81 $40

Question

Social Studies

Irvin Waters

21 December, 00:59

A stock has a Price/Earnings Ratio (P/E) of 4.5. Earnings per share (EPS) of these stocks is 8. What is the stock's market value? $14 $25 $36 $81 $40

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Hayley Deleon · Answer 1

The price-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its per-share earnings.

The Price/Earnings Ratio (P/E Ratio) can be calculated as Market Value/Earnings per Share.

P/E = MV/EPS

Substituting the values we have:

4.5 = MV/8

MV = $36