Last year the price per share of Stock X increased by k : PS Archive
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# Last year the price per share of Stock X increased by k

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Last year the price per share of Stock X increased by k [#permalink]

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23 Jan 2007, 06:48
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Last year the price per share of Stock X increased by k percent and the earnings per share of Stock X increased by m percent, where k is greater than m. By what percent did the ratio of price per share to earnings per share increase, in terms of k and m?
A. k /m %
B. (k â€“ m) %
C. [100(k â€“ m)] / (100 + k) %
D. [100(k â€“ m)] / (100 + m) %
E. [100(k â€“ m)] / (100 + k + m) %
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23 Jan 2007, 07:11
D

let the initial price per share of Stock = p
and earnings per share of Stock =e

intial ratio =p/e

new price per share of Stock = p + (k/100)p

new earnings per share of Stock = e +( m/100)e

new ratio =[ p + (k/100)p ]/ [e +( m/100)e]

increase in ratio = [new ratio - initial ratio]100/ initial ratio

[100(k â€“ m)] / (100 + m) %
23 Jan 2007, 07:11
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