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bigfoot ltd is currently trading at $72 a share.the company has 9M shares outstanding and earned...

bigfoot ltd is currently trading at $72 a share.the company has 9M shares outstanding and earned 36M last year. it is an energy sector- companies in that sector generally trade at a 17..5 P/E multiple.what is the $price/earnings ratio of bigfoot ltd

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Answer #1

Earnings per share = Total earnings/Number of shares outstanding

= 36 million/9 million

= $4 per share

Price Earnings ratio = Market price per share/Earnings per share

= 72/4

= 18 times

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