price per share & earnings per share

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miachi Newbie | Next Rank: 10 Posts
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price per share & earnings per share

Post Wed Mar 03, 2010 2:45 am
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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) %

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    vibhutirs Newbie | Next Rank: 10 Posts Default Avatar
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    Post Wed Mar 03, 2010 3:14 am
    Is answer A

    harsh.champ Legendary Member
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    Post Wed Mar 03, 2010 4:36 am
    miachi 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) %
    New price per share= p(1 + k/100)
    Earning per share = e(1 + m/100)


    A

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    kstv Legendary Member Default Avatar
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    Post Wed Mar 03, 2010 6:57 am
    IMO D
    P = 100 E = 10
    After increase P1 = 100 + k and E1 = 10+0.1m

    Increase in ratio is P1/E1 - P/E

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