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If a Stock's P/E Ratio Is 13

Question 106

Multiple Choice

If a stock's P/E ratio is 13.5 at a time when earnings are $3 per year, what is the stock's current price?

A) $4.50
B) $18.00
C) $22.22
D) $40.50 P/E = 13.5X
Then P = 13.5 x $3

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