Answer the questions from the passage-
Following information is provided about a Firm:
Share Capital:
Equity (Rs.10) Rs. 4,00,000
12% Preference Rs. 1,00,000
General Reserve Rs. 1,84,000
10% Debentures Rs. 4,00,000
Current Liabilities Rs. 1,00,000
Fixed Assets Rs. 9,50,000
Current Assets Rs. 2,34,000
The market price of the share is Rs. 34 and the net profit after tax was Rs. 1,50,000, and the tax had amounted to Rs. 50,000.
P/E Ratio (Price Earning Ratio)
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → 9.86 Times
Given:
-
Market price per share = ₹34
-
EPS (from previous question) = ₹3.45
P/E Ratio=Market Price per Share/ Earnings per Share
=3.4534 =9.855 ≈9.86