Question
Byron Ltd reported 32000 in earnings during the current
financial year. The total shares outstanding are 40000 at a market price of 18 per share. What is Byron Ltd’s P/E Ratio?Solution
Earning per share = total earnings/no of shares outstanding = 32000/40000 = 0.8 P/E Ratio = Market Price/Earning per share = 18/0.8= 22.5
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