n NISM Certifications
V-A NISM Series V-A
Medium

A company has an Earnings Per Share (EPS) of Rs 5 and a Price-to-Earnings (P/E) ratio of 30. What will be the market price of the shares of this company?

Practice question from NISM Series V A - Mock Test 4 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Rs. 0.60

  2. B

    Rs. 6

  3. Rs. 150

    Correct answer

  4. D

    Rs. 75

Why this is the answer

The P/E ratio formula is: \[ \text{Market Price} = \text{P/E} \times \text{EPS} \]

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