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If Earnings Price (EP) ratio is 0.5 and Earning Per Share(EPS) is $8, the market price of the share will be?

<p><strong>A.$40</strong></p> <p><strong>B.$100</strong></p> <p><strong>C.$160</strong></p> <p><strong>D.$0.40</strong></p> <p><strong>E. Non of these(if so please mention how much)</strong></p> <p> </p> <p> </p>

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Question ajoutée par VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.
Date de publication: 2014/12/04
Lesley Lanag CMA CPA
par Lesley Lanag CMA CPA , Senior Accountant , Takaful Emarat Insurance (P.S.C)

Ans.  (E)  16

 

Price per share = EPS / EP ratio

georgei assi
par georgei assi , مدير حسابات , المجموعة السورية

E

Vinod Jetley
par Vinod Jetley , Assistant General Manager , State Bank of India

E. $16

Alex Al Yazouri
par Alex Al Yazouri , General Manager , Al Mushref Cooperative Society

(E) Non of the above.

Malik Khalid Mahmood
par Malik Khalid Mahmood , Regional Finance Manager , Leosons International FZ LLC

Option E

Urslan Ali
par Urslan Ali , Supervisor Finance, Logistics , Sevens LLC - Al Naboodah Group

Option E

the real answer is4 

PROOF 

EP Ratio Price/Earning which is .5

4/8 = .5

Krishna Patel
par Krishna Patel , Senior Consultant , PwC

Market Price of the Share is $16 and Option is E, None of the above.

 

So EP ratio is the inverse of PE Ratio which is = Earnings per Share / Market Price per Share

We know EPS = 8 and EP Ratio is 0.5 then assigning these values to the equation, we get

0.5 = 8/ Price, Solving for Price we get 16 as the Market Price.

Option (E) Answer will be

Given that, E/P =0.5; E = $8

P = E/0.5 or, $(8/0.5) or $16

 

I'd like to add that EP Ratio and PE Ratio are not the same thing, infact EP Ratio is the inverse of PE Ratio and is actually better known as the Earnings Yield. 

 

AHSAN AKHLAQ
par AHSAN AKHLAQ , accounts manager , sapphire plastic pvt ltd

E

MALIIK SOHAIL ABBAS
par MALIIK SOHAIL ABBAS , ACCOUNTS MANAGER , AL RAWDAH GREEN SWEET WATER

thansk venakatiramanoption D

the answer is16

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