I need assistance with this general accounting question using appropriate principles. Calloway's has $945,000 in sales. The profit margin is 4.2 percent and the firmhas 6,800 shares of stock outstanding. The market price per share is $18. Whatis the price-earnings ratio?a) 2.89b) 3.08c) 3.43d) 3.56

Step 1: Definition of Price-Earnings (P/E) RatioThe Price-Earnings (P/E) ratio is a valuation ratio…

Answered: Calloway's has $945,000 in sales. The…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 2P

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Calloway's has $945,000 in sales. The profit margin is 4.2 percent and the firm has 6,800 shares of stock outstanding. The market price per share is $18. What is the price-earnings ratio? a) 2.89 b) 3.08 c) 3.43 d) 3.56