Q17SE
Question
Computing price/earnings ratio Refer to the HEB data in Short Exercise S13-17. Assume the market price of HEB’s common stock is $19.50 per share. Compute HEB’s price/earnings ratio.
Step-by-Step Solution
Verified Answer
The price/ earnings ratio of the corporation is $6
1Step 1: Basic Introduction
Price/ Earnings ratio lets investors know how much a corporation is worth. The P/E ratio is the stock price per share divided by the corporation's earnings per share for an assigned period.
2Step 2: Computation of price/earnings ratio
Price/earnings ratio | |
| $19.50 |
| $3.25 |
Price/earnings ratio (a/b) | $6 |
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