Question

The earning per share helps in _________.

• A. determining the market price of the equity shares of the company
• B. deciding the face value of the equity shares of the company
• C. determining the face value of the preference shares of the company
• D. None of the Above

Answer 1

The correct option is A determining the market price of the equity shares of the company

Earning per share is the portion of a company's profit allocated to each outstanding share of the common stock. It serves as an indicator of the company's profitability. It is calculated by dividing the market price per equity share by no. of shares. Hence, it helps in determining the market price of the equity shares of the company.