Tanko Ltd had Earnings per share 47k Dividends per share 30k Per value of each share N1.20 market price per share NM1.50 What will be the price earnings rat...
Question 1 Report
What will be the price earnings ratio of the company?
Answer Details
The price-earnings (P/E) ratio of the company can be calculated by dividing the market price per share by the earnings per share (EPS). The P/E ratio shows how much investors are willing to pay for each Naira of the company's earnings.
In this case, to calculate the P/E ratio for Tanko Ltd:
Market price per share / Earnings per share = P/E ratio
N1.50 / N0.47 = N3.19
So, the P/E ratio for Tanko Ltd is N3.19. This means that investors are willing to pay N3.19 for every Naira of the company's earnings.
In simple terms, the P/E ratio is a measure of how much investors are willing to pay for every Naira of the company's earnings and in this case, the P/E ratio for Tanko Ltd is N3.19.
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