Question

Suppose the earnings per share of a stock is $2 and the current price/earnings (p/e) ratio is 10. what is the current price of the stock? group of answer choices

Answer 1

The current price of the stock = $20

What is  stock?

The division of ownership of a corporation or company into shares is known as stock. Depending on the total number of shares, one share of stock represents a fractional ownership interest in the company.

What is mathematical operation?

An operation is a function in mathematics that converts zero or more input values, also known as operands, into a clearly defined output value. The operation's complexity is determined by the number of operands, sometimes referred to as arguments.

According to the given information:

The earnings per share of a stock is  = $2

the current price/earnings (p/e) ratio is =  10

the current price of the stock = P/E

                                             10 = P/2

                                               P = 10*2

                                                P = 20

The current price of the stock = $20

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