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Question: Suppose the EPS of Wal-Mart stock was $2 and the current price per earnings ratio is 10. What is the current price of Wal-Mart stock? The price/earnings ratio (P/E) is calculated as A) stock price divided by earnings per share B) stock price times earnings per share C) earnings per share divided by stock price D) stock price divided by the difference between earnings per share and cash dividends per share What may be the problem with comparing the P/E of stock to the P/E of the overall market?

Question: Suppose the EPS of Wal-Mart stock was $2 and the current price per earnings ratio is 10. What is the current price of Wal-Mart stock? The price/earnings ratio (P/E) is calculated as A) stock price divided by earnings per share B) stock price times earnings per share C) earnings per share divided by stock price D) stock price divided by the difference between earnings per share and cash dividends per share What may be the problem with comparing the P/E of stock to the P/E of the overall market?

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter10: Stockholder's Equity
Section: Chapter Questions
Problem 79E: Ratio Analysis MJO Inc. has the following stockholders equity section of the balance sheet: On the...
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Question: Suppose the EPS of Wal-Mart stock was $2 and the current price per earnings ratio is 10. What is the current price of Wal-Mart stock? The price/earnings ratio (P/E) is calculated as A) stock price divided by earnings per share B) stock price times earnings per share C) earnings per share divided by stock price D) stock price divided by the difference between earnings per share and cash dividends per share What may be the problem with comparing the P/E of stock to the P/E of the overall market?
Transcribed Image Text:Question: Suppose the EPS of Wal-Mart stock was $2 and the current price per earnings ratio is 10. What is the current price of Wal-Mart stock? The price/earnings ratio (P/E) is calculated as A) stock price divided by earnings per share B) stock price times earnings per share C) earnings per share divided by stock price D) stock price divided by the difference between earnings per share and cash dividends per share What may be the problem with comparing the P/E of stock to the P/E of the overall market?
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