Question

Today the common stock of Gresham Technology closed at ​$24.20 per​ share, down ​$0.36 from yesterday....

Today the common stock of Gresham Technology closed at ​$24.20 per​ share, down ​$0.36 from yesterday. If the company has 5.1 million shares outstanding and annual earnings of ​$9.8 ​million, what is its​ P/E ratio​ today? What was its​ P/E ratio​ yesterday?

The​ company's P/E ratio today is

The​ company's P/E ratio yesterday was

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Homework Answers

Answer #1

Given,

Today's price = $24.20

Price decreased = $0.36

Shares outstanding = 5.1 million shares

Annual earnings = $9.8 million

Solution :-

Yesterday's price = $24.20 + $0.36 = $24.56

Earnings per share = Annual earnings shares outstanding

= $9.8 million 5.1 million shares = $1.921568627

Now,

Company's P/E ratio today = Today's price Earnings per share

= $24.20 $1.921568627 = 12.59

Company's P/E ratio yesterday = Yesterday's price Earnings per share

= $24.56 $1.921568627 = 12.78

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