The market price of Friden Company's common stock increased from $15 to $18. Earnings per share of common stock remained unchanged. The company's price-earnings ratio would:

A) increase.
B) decrease.
C) remain unchanged.
D) impossible to determine.

Price-Earnings Ratio

The price-earnings ratio (P/E ratio) is a valuation measure comparing the current share price of a company to its per-share earnings, indicating how much investors are willing to pay per dollar of earnings.

Market Price

The current price at which an asset or service can be bought or sold in the market.

Earnings Per Share

A financial ratio that measures the amount of a company's net income allocated to each share of common stock, indicating the company's profitability.