A company reported $1,050,000 in net income for the current year. Earnings per common share is $1.75 and the year-end market price of the shares is $31.50. Calculate the company's price earnings ratio.
What will be an ideal response?
Price-Earnings Ratio = Market Price per Share/ (Net Income/Weighted-Average
Common Shares Outstanding)
Price-Earnings Ratio = $31.50/1.75=18
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