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Jupiter Explorers has $9,200 in sales. The profit margin is 3 percent. There are 4,400 shares of stock outstanding, with a price of $1.50 per share. What is the company's price–earnings ratio?

Respuesta :

zainsubhani

Answer:

Price-earning ratio=23.9234

Explanation:

First we will calculate the earning per share:

Earning Per share=(Sales*Profit Margin)/Total shares

Sales=$9,200

Profit Margin=3%=0.03

Total Shares of Stock=4,400

Earning Per share=($9,200*0.03)/4400

Earning Per share=$0.0627

[tex]Price\ -\ Earning\ Ratio=\frac{Market\ Price}{Earning\ Per\ share}[/tex]

Market Price per share=$1.50

Price-earning ratio=[tex]\frac{\$1.50}{\$0.0627}[/tex]

Price-earning ratio=23.9234

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