Question

The common stock of a FinTech company is currently selling at $55.75 a share. The company...

The common stock of a FinTech company is currently selling at $55.75 a share. The company has a net income of $77,575 and there are 28,000 shares of stock outstanding. What is the P/E ratio for the firm?

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Answer #1

20 times

P/E Ratio = Market Price Per Share / Earning Per Share
= $         55.75 / $         2.77
= 20 times
Working:
Earning Per Share = Net Income / Shares of stock outstanding
= $       77,575 /        28,000
= $            2.77
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