Question

Vriend Software Inc.’s book value per share is $12.37. Earnings per share is $1.68, and the firm’s stock trades in the stock market at 2.5 times book value per share. What will the P/E ratio be? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Answer 1

18.41

Step-by-step explanation:

Vriend software incorporation has a book value of $12.37

The earnings per share is $1.68

The firm stock trade in the stock market is 2.5 times

The first step is to calculate the price

= 2.5 × book value

= 2.5 × 12.37

= 30.93

Therefore the P/E ratio can be calculated calculated as follows

= price/earnings per share

= 30.93/1.68

= 18.41

Hence the P/E ratio is 18.41