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Agata [3.3K]
3 years ago
13

Jupiter Explorers has $5,600 in sales. The profit margin is 3 percent. There are 4,000 shares of stock outstanding, with a price

of $1.20 per share. What is the company's price–earnings ratio?
Business
1 answer:
Irina18 [472]3 years ago
6 0

Answer:

Price-earning ratio is 28.57 .

Explanation:

Price earning is a ratio widely used by common stock holder in stock market. The ratio is used to measures share price in relation to earning per share. The ratio tells us years require to recover amount spend on acquisition of share.

Detail calculation is given below.

Sales                      $ 5,600  -A

Net profit               $    168   -B

EPS                         $ 0.042 -B/4000

Price-earning ratio = 1.2/EPS  = 28.57  

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