passwella.
Menu

JAMB Principles of Accounts 2000 Question 34

Question 34

Interpretation of Accounts

Use the information below to answer questions 33 and 34.
Maimalari Ltd had I. Earnings per share 47k II. Dividend per share 30k III. Par value of each share ₦1.20 IV. Market price per share ₦1.50.
What will be the price earnings ratio of the company?

  1. A.3.91
  2. B.3.19
  3. C.2.95
  4. D.2.55
Show the answer and explanation

Answer: B (3.19)

Explanation

Price earnings ratio = market price ÷ earnings per share = 1.50 ÷ 0.47 ≈ 3.19.