The company's price-earnings ratio is closest to:A) 19.79B) 0.51C) 8.36D) 12.53

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lovepreet singh · Accepted Answer

Final Answer : A, Explanation :  Earnings per share = Net Income ÷ Average number of common shares outstanding*= $17,500 ÷ 90,000 shares = $0.19 per share (rounded)*Number of common shares outstanding = Common stock ÷ Par value= $270,000 ÷ $3 per share = 90,000 sharesPrice-earnings ratio = Market price per share ÷ Earnings per share= $3.76 ÷ $0.19 = 19.79 (rounded)

The company's price-earnings ratio is closest to:

A) 19.79
B) 0.51
C) 8.36
D) 12.53

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