Answer:
16
Explanation:
The formula to compute the price earning ratio is shown below:
Price-earnings ratio = (Market price per share) ÷ (Earning per share)
where,
Earning per share is $1.50
And, the market price per share is
= Cash flow per share × price/cash flow ratio
= $3 × 8
= $24
Now placing this value to the formula above
So, the price earning ratio is
= $24 ÷ $1.50
= 16
