Question

Nungesser Corporation has an EPS of $1.96, a cash flow per share of $3.15, and a price/cash flow ratio of 7.76×. What is its P/E ratio?

Answer 1

12.47

Step-by-step explanation:

Given :

Earning per share, EPS = $1.96

Cashflow per share = $3.15

Price / Cash flow ratio = 7.76

The P/E ratio = share price / Earning per share

The Share price is given by :

Cashflow per share * price to cash flow ratio

Share price = $3.15 * 7.76 = $24.444

Now ;

P/E ratio = Share price / Earning per share = $24.444 / $1.96

P/E ratio = 12.4714

P/E ratio = 12.47