Question

What is the price earnings ratio?

Answer 1

market value per share ÷ per share earning

Answer 2

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Hello vanshi,

The price earning is the ratio of a company's stock price to the company's earnings per share. The ratio is used in valuing companies. As an example, if stock A is trading at $24 and the earnings per share fot the most recent 12 month period is $3, then stock A has a P/E ratio of 24/3 or
8.

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