--%>
Assignment Help - homework help

How can we calculate Price earnings ratio

How can we calculate Price earnings ratio?

E

Expert

Verified

The P/E Ratio is computed by dividing Market price per equity share to Earnings per share. This permits the company to estimate the appreciation in value of share of company and is employed by investors for decision making on whether or not to purchase shares in a specific company.
Subsequent method is employed to compute price earnings ratio:
‘[Price Earnings Ratio = Market price per equity share / Earnings per share]’

For illustration :

The market price of share is Rs. 20 and earnings per share is Rs. 4
Price Earnings Ratio = 20/4 = Rs. 5

   Related Questions in Business Economics

  • Q : Checkout problem A grocery store chain

    A grocery store chain is considering ways to improve the performance of the waiting lines at their checkout stands. A heavily trafficked checkout stand is monitored for 120 min. In that period, 60 customers have their groceries rung up, and depart from the store. The

    		•
  • Q : Illustrate major economic flows that

    Illustrate major economic flows that link U.S. with nations.  Provide an example to illustrate each flow.  Explain the relationship between the top and bottom flows.

    		•
  • Q : Society decide its optimal point on the

    How does society decide its optimal point on the production possibilities curve?

    		•
  • Q : Problem on productive contribution

    Suppositions underpinning simple production possibilities frontier models don’t comprise a need that: (i) Net resources are fixed. (ii) All resources are efficiently employed. (iii) Technology is steady. (iv) Resource owners are paid according t

    		•
  • Q : What are patent rights Patent rights :

    Patent rights: It is a unique license or right granted to a company or an Individual to make a specific product or utilize a specific technology.

    		•
  • Q : Firms operating under Cournot

    Question: Suppose three identical firms are engaged in Cournot competition in quantities. They all have marginal costs equal to 40. Market demand is given by:

    Q : Reasons for change in expanded

    What are the reasons for change in expanded production possibilities with women?

    		•
  • Q : Illustrate Freedom of enterprise and

    Illustrate Freedom of enterprise and choice exist?

    		•
  • Q : Market efficiency while transaction

    Transaction costs tend to be decreased and markets are more efficient when: (w) the government subsidizes a good. (x) inter-market price differentials are eliminated through arbitrage. (y) taxes are used to give for social wants. (z) regulations close

    		•
  • Q : Introduction of the term Cost of capital

    Give a brief introduction of the term Cost of capital?

    		•