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if the industry pe ratio for a firm is 10, what is the current stock price for a firm with earnings for $2 / share?

User Cory Price
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Final answer:

The current stock price is $20 per share.

Step-by-step explanation:

The PE ratio for a firm is the price-to-earnings ratio, which is calculated by dividing the stock price by the earnings per share. In this case, the PE ratio is 10 and the earnings per share is $2.

To find the current stock price, we can use the formula:

Stock Price = PE Ratio * Earnings per Share

Substituting the values in, we get:

Stock Price = 10 * $2 = $20

Therefore, the current stock price for a firm with earnings of $2 per share and a PE ratio of 10 is $20 per share.

User SparkyRobinson
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