10 of 20 10010o points TB 1336 A share sells for 20 The comp

10 (of 20) 10010o points TB 13-36 A share sells for $20. The company has $64 million company is A share sells for $20. The company has $64 million in earnings and 200 million outstanding shares. The P/E ratio for the O 625 O . O 200 O 0.31 6.4 TB 13-36 A share sells for $20. The company has $64 mitlion.. Assess Profitablity Liquidity; and Solvency

Solution

Price Earnings Ratio is the ratio of selling price of the share to earnings per share

In the given question, EPS is $ 64 Million / $ 200 Million = 0.32 where as selling price is $ 20.

Thus PE Ratio would be $ 20 / 0.32 = 62.50

Hence answer is Option A

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