If a company's stock is trading at $50 per share and its earnings per share are $5, what is the price-earnings (P/E) ratio? A) 5 B) 7 C) 10 D) 15 Answer: C) 10 Explanation: P/E Ratio = Price per Share / Earnings per Share = $50/ $5 = 10.

Cornerstones of Financial Accounting
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Chapter10: Stockholder's Equity
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Problem 79E: Ratio Analysis MJO Inc. has the following stockholders equity section of the balance sheet: On the...
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P/E RATIO? NEED ANSWER

If a company's stock is trading at $50 per share and its earnings per
share are $5, what is the price-earnings (P/E) ratio?
A) 5
B) 7
C) 10
D) 15
Answer: C) 10
Explanation: P/E Ratio = Price per Share / Earnings per Share = $50/
$5 = 10.
Transcribed Image Text:If a company's stock is trading at $50 per share and its earnings per share are $5, what is the price-earnings (P/E) ratio? A) 5 B) 7 C) 10 D) 15 Answer: C) 10 Explanation: P/E Ratio = Price per Share / Earnings per Share = $50/ $5 = 10.
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