Using the Information Given Here, What Is the Price-Earnings Ratio

question 106

Multiple Choice

Using the information given here, what is the price-earnings ratio for DEF Company?
• After-tax income = $180,000
• Number of shares outstanding = 60,000
• Price per share = $30
• Book value per share = $10
• Earnings per share = $3.00

• A) $3.00
• B) $4.00
• C) $7.50
• D) $10.00
• E) $20.00

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Definitions:

Ticket Prices

The amount charged for admission to an event or access to a service.

Initial Value

The starting monetary or numerical value of an asset or investment before any gains, losses, or other changes.

Percent Change

A measure that denotes the degree of change over time, calculated by subtracting the original value from the new value, then dividing by the original value and multiplying by 100 to get a percentage.

Percent More

A relative increase from one value to another expressed as a percentage.