Multiple Choice
Which of the following is NOT a financial ratio category?
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14. Financial Statement Analysis
Ratios: Earnings Per Share (EPS)
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Ultra Petroleum (UPL) has earnings per share (EPS) of $1.75 and a price-to-earnings (P/E) ratio of 42.56. What is the stock price?
A
$74.48
B
$40.80
C
$24.32
D
$1.75
Verified step by step guidance1
Understand the relationship between the Price-to-Earnings (P/E) ratio, Earnings Per Share (EPS), and the stock price. The formula is: \( \text{Stock Price} = \text{P/E Ratio} \times \text{EPS} \).
Identify the given values in the problem: \( \text{EPS} = 1.75 \) and \( \text{P/E Ratio} = 42.56 \).
Substitute the given values into the formula: \( \text{Stock Price} = 42.56 \times 1.75 \).
Perform the multiplication to calculate the stock price. Ensure accuracy in the calculation to match the provided options.
Compare the calculated stock price with the provided answer choices to select the correct one.
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