Question

knowledge check 01

during the current year, armstrong corporation reported net income of $18 million and eps of $5.00 per share. the average number of common shares outstanding during the year was 3.6 million. the price of a share of its common stock was $2.50 at the beginning of the year and $5.00 at the end of the year. what is the companys price/earnings (p/e) ratio at the end of the year?
note: round your answer to 2 decimal places.

price/earnings (p/e) ratio

Explanation:

Identify given values and formula

$$
LATEXBLOCK0
$$

Calculate the P/E ratio

$$ \text{P/E Ratio} = \frac{5.00}{5.00} = 1.00 $$

Answer:

During the current year, Armstrong Corporation reported net income of $18 million and EPS of $5.00 per share. The average number of common shares outstanding during the year was 3.6 million. The price of a share of its common stock was $2.50 at the beginning of the year and $5.00 at the end of the year. What is the company's price/earnings (P/E) ratio at the end of the year?
Note: Round your answer to 2 decimal places.

Price/earnings (P/E) ratio <blank>1.00</blank>