Series 7 practice questionmediumAnalysis and Valuation 521
A stock selling at $22 with earnings per share of $2 has a price-to-earnings ratio of:
- A2
- B13
- C11✓ Correct answer
- D9
Explanation
Why C — 11
The P/E ratio equals market price per share divided by earnings per share. $22 divided by $2 equals 11.
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