Instructions

Look up the stock’s current market price. This is the amount that each share is selling for. You can find this information in most newspapers, on the company’s website, or on any finance or investment website.

Calculate your price to earnings ratio. Price to earnings ratio is equal to the market price divided by the EPS. For example, if a stock is selling for $100 and the EPS is equal to $5, then the P/E ratio is 20. This means that an investor who owns this company’s stock is paying $20 for every $1 of earnings.

Resources

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