Series 7 Exam Question 248: Answer and Explanation

Question: 248

If LMN common stock has a $2.20 dividend, a current yield of 5.0%, a PE ratio of 6, and is trading at $44, its approximate earnings per share is

• A. $0.44
• B. $2.73
• C. $7.33
• D. $8.80

Correct Answer: C

Explanation:

C. To determine a stock's earnings per share (EPS), you can divide the stock's price by the PE (price earnings) ratio.