Question

In: Finance

Phantom enterprises' shares are trading at a price of $50 per share.

Phantom enterprises' shares are trading at a price of $50 per share. We know that Phantom's Price-Earnings ratio is 20x and the number of shares outstanding amounts to 10 million.  Estimate what Phantom's earnings?


a.

$2.5 million


b.

$25.0 million


c.

$10.0 million


d.

$100.0 million

Solutions

Expert Solution

The earnings is computed as shown below:

= (Price per share / PE ratio) x Number of shares outstanding

= ($ 50 / 20x) x 10 million

= $ 25.0 million

jeff jeffy answered 2 years ago
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