If the p/e ratio remains constant, then The price of its stock will be 55
- A stock reflects a claim on a company's assets and earnings as well as a share in the ownership of the business. As a result, investors own a portion of the business. Fractional shares of stock, which are less than whole shares of ordinary stock, also signify ownership in a corporation.
- Stocks signify ownership in a corporation that is publicly traded. You take a stake in a firm when you purchase its shares. If a corporation has 100,000 shares, for instance, and you purchase 1,000 of them, you will own 1% of the business.
- P/E ratio last year 20 =50/2.50
- Earnings per share this year 2.75 =2.50*1.10
- Earnings per share 2.75 X P/E ratio 20
- Price of stock 55
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