Answer: Price-earnings ratio= 22.0
Step-by-step explanation:
Given: A company had a market price of $38.50 per share, earnings per share of $1.75, and dividends per share of $0.90
To find: price-earnings ratio
Required formula: [tex]\text{price-earnings ratio }=\dfrac{\text{ Market Price per Share}}{\text{Earnings Per Share}}[/tex]
Then, Price-earnings ratio = [tex]\dfrac{\$38.50}{\$1.75}[/tex]
⇒Price-earnings ratio = [tex]\dfrac{22}{1}[/tex]
Hence, the price-earnings ratio= 22.0
