Question

Favorita candy's stock is expected to earn $2.70 per share this year. It's P/E ratio is 21. What price is the stock price?

Answer 1

$56.7

Explanation:

Given

Earning per share=E=$2.70

P/E Ratio=21

The formula for P/E ratio is :

P/E Ratio=Price/Earning

Where Price is the price of share in stock and earning the amount earned on one share.

Putting the values of Earning and P/E ratio in the formula

21=Price/2.70

21*2.70=Price

Price=$56.7

So the stock price is $56.7..