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Shown below are selected data from the financial statements of Noble Computers.(Dollar amounts are in millions,except for the per share data. )
Noble reported earnings per share for the year of $6 and paid cash dividends of $2.00 per share.At year-end,the Wall Street Journal listed Noble's capital stock as trading at $81 per share.
-200 Noble's price-earnings ratio at year end was:
A)0.07
B)13.5
C)17
D)1.42

Question

[The following information applies to the questions displayed below.]
Shown below are selected data from the financial statements of Noble Computers.(Dollar amounts are in millions,except for the per share data. )
  Noble reported earnings per share for the year of $6 and paid cash dividends of $2.00 per share.At year-end,the Wall Street Journal listed Noble's capital stock as trading at $81 per share.
-200 Noble's price-earnings ratio at year end was:
A)0.07 
B)13.5 
C)17 
D)1.42

Quizplus · Accepted Answer

Noble's price-earnings ratio (P/E ratio) is calculated by dividing the market value per share by the earnings per share (EPS). Given the information, the correct P/E ratio is 13.5, indicating how much investors are willing to pay per dollar of earnings.

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