The Price-Earnings Ratio Is Computed by Dividing the Market Price

question 124

True/False

The price-earnings ratio is computed by dividing the market price per share by the current earnings per share.

---

Definitions:

Stockholders' Equity

Stockholders' Equity represents the ownership interest of shareholders in a corporation, calculated as the company's total assets minus its total liabilities.

Liability

A financial obligation or debt owed by a company to third parties, such as loans, accounts payable, or mortgages.

Date of Declaration

The official date on which a company's board of directors announces its intention to pay a dividend.

Issued Shares

Represents the total number of shares that have been allocated by a corporation and are held by shareholders, including both public investors and company officers or insiders.