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21. If the P/E ratio of a company's common stock...

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21. If the P/E ratio of a company's common stock were 12, and its earnings were $ 2.50 per common share: A) the market value of the common stock would be $20.83 per share. B) the market value of the common stock would be $25.00 per share. C) an increase in earnings of $0.20 per share, with no change in the multiple, would result in a market price increase of $2.40 per share. D) an increase in earnings of $0.20 per share, with no change in the multiple, would result in a market price increase of $1.67 per share.

 

Paper#2060 | Written in 18-Jul-2015

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