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A share trading at 24 with earnings per share of 4 has a price to earnings ratio of:
A6 times
B8 times
C4 times
D2 times
Answer & Solution
Correct answer: A. 6 times
1. Divide the price by the earnings per share.
2. 24 divided by 4 is 6.
3. The ratio is 6.
_Source: OpenStax Principles of Finance 2e, Chapter 11, Stocks and Stock Valuation._
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