what is a P/E ratio??

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what is a P/E ratio??

2006-12-13 15:39:10 · 2 answers · asked by Anonymous in Business & Finance ➔ Corporations

2 answers

P/E ratio is the price-earnings ratio of a publicly-traded stock of a corporation. Here's the formula.

PE = P / EPS

where P is the market price of the stock and;
EPS is the earnings per share of the stock.

Here's the formula for earnings per share:

EPS = (Net Income - Preferred stock Dividends)/Common Stock Outstanding

2006-12-13 15:57:09 · answer #1 · answered by Robert K 2 · 0⤊ 0⤋

It stands for the price / earning ratio. How much the stock is paying in dividends compared to its purchase price.

2006-12-13 23:51:13 · answer #2 · answered by lyyman 5 · 0⤊ 0⤋