Question

The​ P/E ratio​ (price-to-earnings ratio) of a​ company's stock is the ratio of the price of the stock to the​ company's earnings​ (or profits) per share of​ stock, both measured in dollars. Find the​ P/E ratio of a stock that sells for ​$17.01 and has an earnings of ​$0.73 per share.

Answer 1

Answer:

The  P/E ratio of the company's stock is 23.3.

Step-by-step explanation:

1. Let's review the information given to us to answer the question properly:

Market value of the stock = $ 17.01

Earnings per share of the stock = $ 0.73

2. Find the​ P/E ratio of the stock.

Let's recall the formula of the P/E ratio:

P/E ratio = Market value of the stock/Earnings per share of the stock

Replacing with the real values, we have:

P/E ratio = 17.01/0.73 = 23.3

The  P/E ratio of the company's stock is 23.3.