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    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?
    A 22.5 Correct Answer Incorrect Answer
    B 0.8 Correct Answer Incorrect Answer
    C 25 Correct Answer Incorrect Answer
    D 0.10 Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    P/E Ratio = Price of a share/Earning per share EPS = Profit of the year/Number of shares understanding = 32000/40000 = 0.80 P/E Ratio = 18/0.8 = 22.5

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