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A company's common stock is selling in the market at a "multiple of 15". If the market price of the common stock is currently $10, what is the earnings per share

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jepessoa

Answer:

earnings per share = $0.67

Explanation:

the earnings per share = stock price / multiple value = $10 / 15 = $0.67

When you read that a stock is selling at a multiple of X, it means that the stock price is currently X times the current earnings per share. In this case, since the stock price is $10, to calculate the EPS you must divide 10 by the multiple value.

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