If a Stock's P/E Ratio Is 13

question 106

Multiple Choice

If a stock's P/E ratio is 13.5 at a time when earnings are $3 per year, what is the stock's current price?

• A)$4.50
• B)$18.00
• C)$22.22
• D)$40.50 P/E = 13.5X
• Then P = 13.5 x $3

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Definitions:

Utility Function

A mathematical representation that describes how consumers allocate their spending to maximize satisfaction or utility from goods and services.

Course Grade

The evaluation or assessment of a student's performance in a course, typically represented as a letter or number.

Min/Max Function

A mathematical function that identifies the minimum or maximum value within a particular set of data or input.

Same Income

A scenario in which two or more entities earn or receive an identical amount of money.