question archive Chapter 9 Stock, Bonds, Mutual Funds Stock in Amazing
Chapter 9 Stock, Bonds, Mutual Funds Stock in Amazing
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Chapter 9 Stock, Bonds, Mutual Funds Stock in Amazing.com sells for $18 per share. The company has earnings of $0.50 per share. Find its P/E (price to earnings) ratio.
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PE ratio of a company is a ratio of company's share price to the Earnings per share of the company. This ratio is used for valuing a company and it helps in telling if the company is overpriced or underpriced.
PE ratio= Price/ Earnings per share
= $18/$0.5
= 36
