Series 7 practice questionmediumAnalysis and Valuation 511
A stock selling at $34 with earnings per share of $2 has a price-to-earnings ratio of:
- A17✓ Correct answer
- B2
- C19
- D15
Explanation
Why A — 17
The P/E ratio equals market price per share divided by earnings per share. $34 divided by $2 equals 17.
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