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last year, big w company reported earnings per share of $2.30 when its stock was selling for $46.00. if its earnings this year increase by 10 percent and the p/e ratio remains constant, what will be the price of its stock?

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If the p/e ratio remains constant, then The  price of its stock will be 55

  • A stock reflects a claim on a company's assets and earnings as well as a share in the ownership of the business. As a result, investors own a portion of the business. Fractional shares of stock, which are less than whole shares of ordinary stock, also signify ownership in a corporation.
  • Stocks signify ownership in a corporation that is publicly traded. You take a stake in a firm when you purchase its shares. If a corporation has 100,000 shares, for instance, and you purchase 1,000 of them, you will own 1% of the business.
  • P/E ratio last year 20  =50/2.50
  •     Earnings per share this year 2.75  =2.50*1.10
  •     Earnings per share  2.75  X P/E ratio 20  
  • Price of stock 55

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