The following information applies to

BritanniaBritannia

Ltd. for the year ended 31 December 2009:

!!ERROR	Profit after interest and tax ()	7,500
	Number of shares in issue	77,000
	Total dividends for year ()	3,205
	Market value per share (pence)	83
	Profit before interest and tax ()	29,600

Requirement:

Compute the price/earnings (PE) ratio for

BritanniaBritannia

Ltd. for 2009.

First, calculate the earnings per share (EPS) for the company as follows:

(Show your answer in pence, to two decimal places.)

EPS

=

Profit after interest and tax Number of ordinary shares

=

=

nothing pence

Next you can calculate the price/earnings ratio.

PE Ratio

=

The calculation of the price/earnings ratio for

BritanniaBritannia

Ltd. is:

(Show your answer in 'times', to two decimal places.)

PE ratio

=

9.74

=

nothing times

You are informed that the company's PE ratio on 31 December 2009 was three times as high as the figure calculated at

31 December 200831 December 2008.

Which one of the following statements is correct?

A.

The company has definitely not earned any more profit during this year.

B.

The company has definitely issued more shares in this year.

C.

The stock market appears to be less confident about the company's future.

D.

The stock market appears to be more confident about the company's future.

Choose from any list or enter any number in the input fields, then continue to the next question.