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No growth industries pays out all of its earnings as dividends. It will pay its next four dollars per share dividend in the year. The discount rate is 15%. What is the price Earnings ratio of the company?

Respuesta :

Answer:

the price earning ratio is 6.67

Step-by-step explanation:

The computation of the price earning per share is shown below:

As we know that

Price earning ratio = Current price ÷ earning per share

= ($4 ÷ 0.15) ÷ ($4)

= 6.67

Hence, the price earning ratio is 6.67

It shows the relationship between the current price and the earning per share

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