The price earnings (P/E) ratio is 5. The earnings per share over the last twelve months...
The price earnings (P/E) ratio is 5. The earnings per share over the last twelve months is $5.20. Common stock has a par value of $1 per share and was issued at $9 per share. What is the current market price of the stock?
Select one:
a. $46.80
b. $45.00
c. $5.00
d. $26.00
Homework Answers
Current market price of the stock
The Current market price of the stock is calculated by using the following formula
Current market price of the stock = Earnings per share x Price Earnings Ratio
= $5.20 per share x 5 Times
= $26.00
“Hence, the Current market price of the stock will be (d). $26.00”
Add Answer to:
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