Price to Earnings

Value to earnings - this ratio shows the cost of the stock. It shows the value that is paid for one share relative to the annual profit earned per share in the corporation. This ratio is calculated by dividing market value per share by Earnings per share. The first variable is taken from the stock - really it is the stock value, which investors are ready to pay for one share of the corporation. The second variable - EPS - is calculated by dividing the profit of the corporation by the number of total shares outstanding. More information: click here to view more of this

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