Accounting Multiple Choice Question – 29 March 2023

An ordinary share in Alex plc, which is a quoted company has a nominal value of £0.50.

The latest financial statements show earnings per share of £0.10 and a price-earnings ratio of 15.

What is the market value of an ordinary share in Alex plc?

Select ONE answer:

1. £0.50
2. £1.50
3. £2.00
4. £2.50

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct – PE= Share Price / EPS == > 15 = x / £0.10 == > 15 / 0.10 = £1.50
3. Not correct
4. Not correct

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