1. The target stock price for Babies Inc. is $25.00, with a benchmark price earnings ratio...
1. The target stock price for Babies Inc. is $25.00, with a benchmark price earnings ratio (P/E) of 10. What would be its earnings per share? (show work)
- $250 per share
- $25 per share
- $2.50 per share
- $0.40 per share
Homework Answers
Explanation:
Price earnings ratio = share price/ Earnings per share
Given , Price earnings ratio =10
Share price =$25
Therefore, 10=$25/EPS
EPS =$25/10
EPS =$2.50
So the answer is Option C. i.e $2.5 per share
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