The price per share is $30 and earnings per share is $3.5 then price for earnings ratio would be ___________?
Correct answer: A. 8.57 times
- A. 8.57 times
- B. 0.0857
- C. 0.11 times
- D. 0.11
Explanation
The price-to-earnings ratio is calculated as market price per share divided by earnings per share: 30 ÷ 3.5 = 8.57 times. Values such as 0.0857 are decimal reciprocals or misplaced decimal forms, not the P/E ratio.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
Practise Business Finance
975 free Business Finance MCQs from Management Sciences, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Management Sciences questions like this
Management Sciences is on 2 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Business Finance questions
The price per share is $25 and the cash flow per share is $6 then the price to cash flow ratio would be ___________?
The formula such as, net income available for common stockholders divided by total assets is used to calculate __________?
The price per ratio is divided by cash flow per share ratio, is used for calculating __________?
A technique that is used in comparative analysis of financial statement is __________?
To whom does the Treasurer most likely report?
Rise in stock market is called_______?