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___________ ratio indicates the number of times the earning per share is covered by its market price

  • A.Price Earning
  • B.Capital Gearing
  • C.Dividend yield
  • D.Earning yield

Answer: A

The price earning ratio is the one that shows how many times the earning per share is covered by its market price. It is the market price per share divided by earnings per share, and so shows the number of times of earnings that investors pay. Capital gearing is the ratio of fixed-charge capital to equity, dividend yield is dividend divided by market price, and earning yield is earnings divided by market price, which is the inverse of the P/E ratio.

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