Series 7 practice questionmediumAnalysis and Valuation 506
A stock selling at $24 with earnings per share of $2 has a price-to-earnings ratio of:
- A2
- B14
- C10
- D12✓ Correct answer
Explanation
Why D — 12
The P/E ratio equals market price per share divided by earnings per share. $24 divided by $2 equals 12.
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