Calculating the price-earnings ratio


Ratzell's Place has a market-to-book ratio of 2.7, net income of $68,400, a book value per share of $37, and 45,000 shares of stock outstanding. What is the price-earnings ratio?

a. 24.34

b. 28.16

c. 55.10

d. 59.09

e. 65.72

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Finance Basics: Calculating the price-earnings ratio
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