Company X has a P/E ratio of 10 and a stock price of $50 per share. Calculate earnings per share of the company.
A)$6 per share
B)$10 per share
C)$0.20 per share
D)$5 per share

Question

Quizplus · Accepted Answer

P/E ratio (Price-to-earnings ratio) is the ratio of the company's stock price to its earnings per share (EPS). Therefore, EPS = stock price / P/E ratio.
EPS = $50 / 10
EPS = $5 per share.

Company X Has a P/E Ratio of 10 and a Stock