Answered: QQ Company's book value per share at…

QQ Company's book value per share at the end of last year was $60, its earnings per share for the year were $10, and its market/book ratio of 3x. What was its P/E ratio? O 6.00 18.00 02.00 20.00

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter7: Stocks (equity) - Characterstics And Valuation

Section: Chapter Questions

Problem 18PROB

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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

A4)

QQ Company's book value per share at the end of last year was $60, its earnings per
share for the year were $10, and its market/book ratio of 3x. What was its P/E ratio?
06.00
18.00
02.00
20.00

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