Practice Questions Chat

Price-Earnings ratios (P/E ratios) are a measure of ratio between a company’s share price and their per-share earnings. One particular company is currently valued at $450 million, and the stock price sits at $90 per share. If this company recently reported earnings of $125 million, what is the company’s current P/E ratio?

3.6

2.8

5.0

4.4

1.9

how ?

kindly explain the process

When a publicly traded company buys back some of its shares, they become unavailable to the general public, which often leads the remaining shares to go up in value. A company buys back 1/8 of its outstanding shares for their current market value of $67.5 million. After the price stabilizes, the remaining shares would be predicted to increase by about what percent?

12.5%

25%

14.3%

16.6%

20%

Hi guys, to what degree do we need to practice geometry, I understand only coordinate geometry is tested on the GMAT FE

Cordinate geo doesn’t get tested in GMAT focus

Ohh, thanks.... So what part of geo gets tested?

Sure,
To calculate P/E ratio of a company, we need to divide it’s price per share by its earnings per share. In the given problem, we need to calculate the latter as it is not given to us directly.

The formula for earnings per share is EARNINGS/ TOTAL NUMBER OF OUTSTANDING SHARES.

Now again, we have not been given the total number of outstanding shares so we’ll have to calculate it by dividing the company’s market capital by the company’s stock price i.e., 450mn/90 = 5mn shares.

Now, we can calculate the EPS or earnings per share by dividing the earning by number of outstanding shares i.e., 125mn/5mn = 25 dollars per share.

And now fianlly we can calculate the P/E ratio by dividing the price per share and earnings per share as mentioned earlier.
Final answer: 90/25 = 3.6.

As far as I know, It’s actually the opposite. Coordinate geometry is tested on the gmat (quite challenging at times!) and geometry has been removed totally, although some concepts/formulae might come in handy.

Coordinate Geometry is tested in GMAT Focus

Interesting, I gave my GMAT couple of weeks back. And i clearly remember, no cordinate geo.

sayan640, Remaining shares will increase by 14.3%

­
­

Can anyone help me with this?

Which of the following can be the median of four positive integers a,b,c, and d?

I. a+d/2

II. a+b+c/3

III. a+b+c

IV. a+b+c+d
A. I only
B. II only
C. I and II only
D. I and III only
E. II, III, and IV only

The answer is C but I don’t get why II can be true

What was your answer, only C seems logical.

My answer was A

I’m unable to understand how II would be possible

So a,b,c,d are four positive integers. Now for option 2, (a+b+c)/3, consider simple case of 1,1,1,1. Median is 1 and the option 2 also gives a 1. I don’t mean to say to use a trial and error, but at times this would give you a quicker way of eliminating odd one’s out

Exactly, if all the values are the same that median would be equal to the average of any no of values of the series...

Oh right, got it! Thank you