객관식
Which of the following is the equation used to determine Earnings Per Share (EPS)?
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14. Financial Statement Analysis
Ratios: Earnings Per Share (EPS)
객관식
Which financial ratio is calculated by dividing the market price per common share by earnings per share (EPS)?
A
Return on Equity (ROE)
B
Earnings Per Share (EPS)
C
Price-Earnings (P/E) Ratio
D
Dividend Yield
검증된 단계별 안내1
Step 1: Understand the question. The problem is asking for the financial ratio that is calculated by dividing the market price per common share by earnings per share (EPS).
Step 2: Recall the formula for the Price-Earnings (P/E) Ratio. The P/E Ratio is defined as: .
Step 3: Compare the given options. Return on Equity (ROE) measures profitability relative to shareholders' equity, Earnings Per Share (EPS) is a measure of profitability per share, and Dividend Yield measures the dividend income relative to the market price. None of these match the formula provided.
Step 4: Identify the correct answer. The Price-Earnings (P/E) Ratio is the financial ratio that matches the formula provided in the question.
Step 5: Conclude that the correct answer is Price-Earnings (P/E) Ratio, as it is calculated by dividing the market price per common share by earnings per share (EPS).
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