Series 7 practice questionmediumAnalysis and Valuation 501
A stock selling at $30 with earnings per share of $2 has a price-to-earnings ratio of:
- A2
- B17
- C15✓ Correct answer
- D13
Explanation
Why C — 15
The P/E ratio equals market price per share divided by earnings per share. $30 divided by $2 equals 15.
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