Answer:
A. $66
Explanation:
The price of the company's common stock can be determined by multiplying the industry's price/earning ratio by the earnings per share. If the price/earning ratio is 12, and earnings per share are $5.50, the stock price is:
[tex]P=12*\$5.50\\P=\$66[/tex]
Therefore, the answer is alternative A. $66.
Stocks also called equity is the deposit that denotes the right of a certain ratio in a company. The certain ratio of assets and profits of the company in which the stocks are purchased is entitled to the owners of the stocks.
The price of the common stocks is:
Option A. $66
It can be calculated as:
The formula for calculating stock price is:
[tex]\rm Stock \;price (SP) = (\dfrac {P}{E} \times E)[/tex]
Where,
Putting values in formula:
[tex]\rm Stock \;price (SP) = (\dfrac {P}{E} \times E)[/tex]
[tex]\rm SP = 12 \times \$5.50 \\\\SP = \$66[/tex]
Therefore, the stock price will be $66.
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https://brainly.com/question/6994194
