If a Stock's P/E Ratio Is 13

question 23

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

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Definitions:

Phoronids

A small phylum of marine animals that live in tubular structures and filter feed, known for their horseshoe-shaped lophophore.

Gastropods

A large class of mollusks that includes snails and slugs, characterized by a univalve shell or the absence of a shell.

Leeches

Parasitic or predatory worms belonging to the phylum Annelida and known for their use in medicine, especially for bloodletting.

Polychaetes

A class of annelid worms, characterized by having many legs or bristles, often living in marine environments.