
The Profit and Loss Account of a limited company is shown below:

The company has issued 100,000 ordinary shares of £1 each. Their current market price is £12.
What is the company’s price earnings ratio?
Select ONE answer:
- 1.5
- 2
- 3
- 6
Show your workings to arrive at your answer, and explain and justify your reasons:
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This multiple-choice question is suitable for Accounting KS5 classes.
The answer is 3
- Not correct
- Not correct
- Correct ==> (£400,000 / 100,000) = 4 ==> £12 / 4 = 3
- Not correct
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