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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 – m) % C. [100(k – m)] / (100 + k) % D. [100(k – m)] / (100 + m) % E. [100(k – m)] / (100 + k + m) %

Put in some values to figure it out.

Say original Price per share (PPS) = $100 and original Earnings per share (EPS) = $100 Ratio PPS/EPS = 100/100 = 1

Say PPS increased by 20% (k) and became 120 Say EPS increased by 10% (m) and became 110 Ratio PPS/EPS = 12/11

This is an increase of 1/11 = 100/11 %

Only option (D) gives you 100/11 when k = 20 and m = 10

How did you go from 12/11 to an increase of 100/11 percent?

According to original prices, PPS/EPS = 1 After the increase, PPS/EPS = 12/11

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

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19 Jun 2016, 23:08

to keep it simple for solving....assume EPS and PPS to be 100...covert quant lang to maths....((more-less)*100)less to get the answer in terms of K and M

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 – m) % C. [100(k – m)] / (100 + k) % D. [100(k – m)] / (100 + m) % E. [100(k – m)] / (100 + k + m) %

Let's use the INPUT-OUTPUT approach.

Another approach is to plug in values.

Let $100 be the original price per share of Stock X Choose a "nice" value for k. How about k = 200 So, after a 200% increase, the new price per share = $300

Let $100 be the original earnings per share of Stock X Choose a "nice" value for m. How about m = 100 So, after a 100% increase, the new earnings per share = $200

Original ratio of price/earnings = $100/$100 = 1 New ratio of price/earnings = $300/$200 = 1.5

By what percent did the ratio of price per share to earnings per share increase? So, the percent increase (from 1 to 1.5) is 50%. In other words, when k = 200 and m = 100, the ratio increases 50%

Now, plug in 200 for k, and 100 for m, and look for the answer choice that also yields 50%.

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 ?

Let $100 be the original price per share of Stock X Choose a "nice" value for k. How about k = 200 So, after a 200% increase, the new price per share = $300

Let $100 be the original earnings per share of Stock X Choose a "nice" value for m. How about m = 100 So, after a 100% increase, the new earnings per share = $200

Original ratio of price/earnings = $100/$100 = 1 New ratio of price/earnings = $300/$200 = 1.5

By what percent did the ratio of price per share to earnings per share increase? So, the percent increase (from 1 to 1.5) is 50%. In other words, when k = 200 and m = 100, the ratio increases 50%

Now, plug in 200 for k, and 100 for m, and look for the answer choice that also yields 50%.

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

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12 May 2017, 16:56

I solved it as below:

Old Price = x, Old Earnings = y, Old Ratio = x/y

New Price = x + k% x = x (1+k/100) = x ( k + 100)/100 New Earnings = y + m% y = y ( 1+m/100) = y ( m+100)/100

New Ration = x(k+100) / y(m+100) We need to find New Ratio is how much % greater than old ratio. This is the key point to understand and represent.

Expressing in Mathematical Form: New Ratio = p% more than Old Ratio New Ratio = Old Ratio + p% Old Ratio x(100+k)/y(100+m) = x/y ( 1 + p/100) Simplifying p = (k-m)*100/m+100. Option D
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Re: Last year the price per share of Stock X increased by k percent and [#permalink]

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04 Jul 2017, 11:31

Because this percent question doesn't ask for the actual numbers anywhere, we can plug in numbers

Let us say the original price = 100, and the original earnings = 200 (I chose different numbers just to make sure they didn't accidentally cancel each other out somewhere)

Word problems are hard for me, and especially when it's asking for multiple things things like this one (a ratio, a difference of ratios, and a percent) so I wrote down in a formula what the last sentence was asking for:

The percent increase of the two ratios = 100* [(ratio 2 - ratio 1)/(ratio 1)

Ratio 1 = original price/original earnings = 100/200 = 1/2

Ratio 2 = new price/new earnings new price = 100*(1+(k/100) = 100 + (100k/100) = 100 + k New earning = 200*(1+m/100) = 200 + 200m/100 = 2(100+m Ratio 2 = (100+k)/2(100+m)

Solve for the percent inscrease of the two ratios ((100+k)/2(100+m)) - 1/2)/1/2 ((100+k)/2(100+m) - (100 + m)/2(100+m))/12 (100+k-100-m)/2(100+m) / (1/2) (k-m)/2(100+m) * 2 (k-m)/(100+m) * 100 (we multiply by 100 to get it in % form) 100(k-m)/(100+m) D!

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

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09 Sep 2017, 20:51

SravnaTestPrep wrote:

vaivish1723 wrote:

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 – m) % C. [100(k – m)] / (100 + k) % D. [100(k – m)] / (100 + m) % E. [100(k – m)] / (100 + k + m) %

Let Original price =100 Let original earnings per share =100 Price/ earnings =1

New price = 100+k New earnings per share= 100+m price /earnings = (100+k)/(100+m)

Would you please speak few more words about the expression "((100+k)/(100+m) - 1)" ....? especially about 1...? Is this something as such that "1", when subtracted from a fraction reveals the change, increase or decrease ....?

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 – m) % C. [100(k – m)] / (100 + k) % D. [100(k – m)] / (100 + m) % E. [100(k – m)] / (100 + k + m) %

Let Original price =100 Let original earnings per share =100 Price/ earnings =1

New price = 100+k New earnings per share= 100+m price /earnings = (100+k)/(100+m)

Would you please speak few more words about the expression "((100+k)/(100+m) - 1)" ....? especially about 1...? Is this something as such that "1", when subtracted from a fraction reveals the change, increase or decrease ....?

thanks in advance ...

Hi,

Percent increase =( (New value - original value)/ original value ) * 100 New value = (100+k)/(100+m)

Original value=1

Substituting the above values you get the answer.
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