Asked by Cassie Owens on Jun 05, 2024

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The price-earnings ratio is computed by dividing earnings per share by the par value per share.

Price-earnings Ratio

A valuation ratio of a company's current share price compared to its per-share earnings, indicating market expectations.

Earnings Per Share

Earnings per share (EPS) is a financial metric that divides a company's profit by the number of outstanding shares, indicating the profitability attributed to each share.

Par Value

The nominal or face value of a stock or bond as stated by the issuing company, not necessarily reflecting its market value.

  • Examine the role of financial ratios like dividend yield and price-earnings ratio in appraising the performance of a company.
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Patricia ThomasJun 06, 2024
Final Answer :
False
Explanation :
The price-earnings ratio is computed by dividing the market price per share by the earnings per share. It has nothing to do with the par value per share.