40
100
160
0.4
Answer is Wrong!
Answer is Right!
The correct answer is A. 40.
The price-earnings ratio (P/E ratio) is a valuation ratio that compares a company’s stock price to its earnings per share (EPS). It is calculated by dividing the market price per share (P) by the earnings per share (EPS).
A P/E ratio of 0.05 means that the market price per share is 5% of the earnings per share. In other words, if a company has an EPS of Rs. 8, its market price per share will be Rs. 40.
Option B is incorrect because it is the P/E ratio, not the market value of shares.
Option C is incorrect because it is twice the market value of shares.
Option D is incorrect because it is one-tenth the market value of shares.