A company's common stock is selling in the market at a "multiple of 15". If the market price of the common stock is currently $1

Question

GaryK [48]

3 years ago

14

A company's common stock is selling in the market at a "multiple of 15". If the market price of the common stock is currently $1

0, what is the earnings per share

Business

1 answer:

Angelina_Jolie [31] · Answer 1 · 2022-06-07T12:01:49+03:00

Answer:

earnings per share = $0.67

Explanation:

the earnings per share = stock price / multiple value = $10 / 15 = $0.67

When you read that a stock is selling at a multiple of X, it means that the stock price is currently X times the current earnings per share. In this case, since the stock price is $10, to calculate the EPS you must divide 10 by the multiple value.