Question

assume there is one class of stock at trojan inc, common class a. if trojan inc has a market capitalization of $900 million, the ros is 15%, the roe is 30% and the net income is $10 million what is the firm's p/e ratio? 30 90 45 3 6

Answer 1

Trojan Inc's Price/Earnings (P/E) ratio is 90, calculated by dividing the market capitalization of $900 million by the net income of $10 million. The correct option is B.

The Price/Earnings (P/E) ratio is calculated by dividing the market capitalization by the net income. The formula is:

`\[ P/E = \frac{\text{Market Capitalization}}{\text{Net Income}} \]`

Given that Trojan Inc has a market capitalization of $900 million and a net income of $10 million:

`\[ P/E = \frac{900 \, \text{million}}{10 \, \text{million}} = 90 \]`

Therefore, the P/E ratio for Trojan Inc is 90. The closest option from the provided choices is 90. Option B is the correct answer.