Question

You expect Whirlpool Corporation​ (WHR)to have earnings per share of​ $6.10 over the coming year. If Whirlpool stock is currently trading at​ $87.00 per​ share, then​ Whirlpool's P/E ratio is closest​ to:

A. 13.50
B. 17.00
C. 7.00
D. 14.25

Answer 1

D. 14.25

Step-by-step explanation:

Data provided as per the question below:-

Marginal Propensity to Save = $87.00

Earnings per share = $6.10

The computation of price earning ratio is shown below-

Price earning ratio = Marginal Propensity to Save ÷ Earnings per share

= $87.00 ÷ $6.10

= 14.25

Therefore for computing, the we simply applied the above formula.