20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for March 2025 exams.
Get your discount code >>

Investor ratios

This topic has 1 reply, 2 voices, and was last updated 6 years ago by John Moffat.

Viewing 2 posts - 1 through 2 (of 2 total)

Author
Posts
May 10, 2018 at 6:46 pm #451107
rj87coulson
Member
- Topics: 2
- Replies: 0
Hi,
I am a little confused at how you have calculated the share price in example 1 in Chapter 4. I follow the rest of the workings okay- I just cannot seem to work back to the share prices you have given in the answer.
Any pointers would be great, thanks.
May 11, 2018 at 6:32 am #451165
John Moffat
Keymaster
- Topics: 57
- Replies: 54514
I have used the PE ratio. The PE ratio is the market value per share divided by the earnings per share.
Therefore the MV = PR ratio x EPs
In Year 1, the earnings per share are 5,100/9000.
Therefore the MV = 17.0 x 5,100/9,000 = $9.63
Author
Posts

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic.