The price-earnings ratio is calculated by dividing:

A) Market value per share by earnings per share.
B) Earnings per share by par value per share.
C) Dividends per share by earnings per share.
D) Dividends per share by market value per share.
E) Market value per share by dividends per share.

Price-Earnings Ratio

A valuation ratio of a company's current share price compared to its per-share earnings, used to evaluate if a stock is under or overvalued.

Market Value Per Share

The current price at which a single share of a company's stock is bought or sold in the financial markets.

Earnings Per Share

Earnings Per Share (EPS) is a measure used to indicate the profitability of a company, calculated as the company's net income divided by the number of outstanding shares of its common stock.