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Julie's Market Place has earnings per share of $.35, a book value of $2.10 per share,...

Julie's Market Place has earnings per share of $.35, a book value of $2.10 per share, and a market-to-book ratio of 3. What is the firm's price-earnings ratio?

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Expert Solution

Market price = Book value * Market-to-book ratio = $2.10 * 3 = $6.30

Price-earnings ratio = Market price / EPS = $6.30 / $.35 = 18

jeff jeffy answered 2 years ago
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