To find the price-earnings ratio (P/E ratio) of a stock, we use the formula
[tex]\[ R(P, E) = \frac{P}{E} \][/tex]
where:
- [tex]\( P \)[/tex] is the price per share of the stock
- [tex]\( E \)[/tex] is the earnings per share
Given:
- The price per share [tex]\( P \)[/tex] is \[tex]$32.03
- The earnings per share \( E \) is \$[/tex]1.25
We substitute these values into the formula:
[tex]\[ R(32.03, 1.25) = \frac{32.03}{1.25} \][/tex]
Next, we compute the division:
[tex]\[ \frac{32.03}{1.25} \approx 25.624 \][/tex]
We are asked to round the result to the nearest hundredth. So, we look at the third decimal place (the thousandths place):
[tex]\[ 25.624 \][/tex]
The third decimal place is 4, which is less than 5. Therefore, we round down to:
[tex]\[ 25.62 \][/tex]
Thus, the price-earnings ratio, rounded to the nearest hundredth, is:
[tex]\[ 25.62 \][/tex]
