For the 800 million in sales, the price-earning ratio is 8.04.
Earnings per share (EPS) = (Sales * profit margin) / number of shares
= (AED 800,000,000 * 4.2%) / 4,500,000
= AED 7.47
Price-earnings ratio = Price per share / EPS
= AED 60 / AED 7.47
= 8.04
Price-earnings ratio = 8.04
The price-earnings ratio, also called P/E ratio, P/E, or per, is the ratio of an agency's proportion fee to the employer's income in line with the share. The rate/earnings ratio, also called the P/E ratio, tells investors how much a company is really worth. The ratio is used to evaluate organizations and determine whether they may be overvalued or undervalued.
There's no specific number that indicates expensiveness, however, typically, shares with P/E ratios of underneath 15 are considered cheap, while shares above about 18 are the notion as costly. Depending on your view of the market, expensive is not necessarily bad.
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