Answered

During the current year, Armstrong Corporation reported net income of $18 million and EPS of $5.00 per share. The average number of common shares outstanding during the year was 3.6 million. The price of a share of its common stock was $2.50 at the beginning of the year and $5.00 at the end of the year. What is the company’s price/earnings (P/E) ratio at the end of the year?

Price?earnings (P/E) ratio

Answer :

1.00  is the company’s price/earnings (P/E) ratio at the end of the year .

What is company’s price/earnings (P/E) ratio?

  • Investors can determine the value of a firm using the price/earnings ratio, or P/E ratio.
  • The P/E ratio is the stock price divided by the company's diluted profits per share for a specified time period, such as the previous 12 months.
  • The price-to-earnings ratio reveals how much money investors are willing to part with for every $1 in earnings.

What does a good price earnings PE ratio look like?

  • It's not necessary for a "good" P/E ratio to be high or low on its own.
  • Since the current market average P/E ratio is between 20 and 25, a PE ratio above that range could be viewed negatively while one below that could be viewed favorably.

Price of share at end of year  = 5

Divide by EPS        = 5

Price/earnings (P/E) ratio  =  1.00

Learn more about company’s price/earnings (P/E) ratio

brainly.com/question/14624614

#SPJ4

Other Questions