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The company net profit is $200000 for the period2014 and the outstanding shares at the end of2014 is20000. The share price of the company in the market is $50. A.50 B.5 C.10 D.500
The correct answer is option B. PE Ratio = price per share / EPS.
EPS = $200000 / $20000 = $10, So PE = $50 / $10= $5
The Answer is $5 (PE ratio) : PE ratio = Marker price per share / Earnings per share
