No growth industries pays out all of its earnings as dividends. It will pay its next four dollars per share dividend in the year

Question

3 years ago

14

. The discount rate is 15%. What is the price Earnings ratio of the company?

1 answer:

yaroslaw [1] · Answer 1 · 2022-11-29T14:56:18+03:00

Answer:

the price earning ratio is 6.67

Step-by-step explanation:

The computation of the price earning per share is shown below:

As we know that

Price earning ratio = Current price ÷ earning per share

= ($4 ÷ 0.15) ÷ ($4)

= 6.67

Hence, the price earning ratio is 6.67

It shows the relationship between the current price and the earning per share