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PE ratio is used to measure the value of a company in comparison with its earnings. It is calculated by dividing the market capitalization of a company by its earnings per share. What does this formula mean? Let's take an example: * A company has 10 million shares outstanding, and each share has a price of $10. The market cap (capitalization) of the company would be $100 million ($10 x 10 million shares).
*Please ensure the reporting is done in the right spirit.
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