Multiple choice general knowledge

Price of a share is determined by?

  1. PE/EPS

  2. EPS/PE

  3. (EPS/PE)*100

  4. PE*EPS

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The PE ratio (Price-to-Earnings) is calculated as Price divided by EPS. Rearranging this formula gives Price = PE × EPS. This is the fundamental relationship between share price, PE ratio, and earnings per share.