Lucid Corporation has the same share capital (1,000,000 shares outstanding) in 2008 and in 2009 and pays a dividend of ten cents a share in both years. The market price of its shares doubles over the two years. Earnings are identical both years.
Over this two year period, Lucid’s price/earnings ratio will:
No such ratio exists
Stay the same
There is not enough information provided to make an assessment