If Earnings-Price (E-P) ratio is 0.05 and Earnings Per Share (EPS) is Rs. 8 the market price of the share will be

40
100
160
0.4

The correct answer is A. 40.

The Earnings-Price (E-P) ratio is a measure of the valuation of a company’s stock. It is calculated by dividing the company’s earnings per share (EPS) by its market price per share. A high E-P ratio indicates that investors are willing to pay a premium for the company’s stock, while a low E-P ratio indicates that investors are not willing to pay a premium for the company’s stock.

In this case, the E-P ratio is 0.05 and the EPS is Rs. 8. This means that the market price of the share is Rs. 40.

Option B is incorrect because it is the EPS, not the market price of the share.

Option C is incorrect because it is twice the market price of the share.

Option D is incorrect because it is one-twentieth the market price of the share.

Exit mobile version