... of Stock: $10 ÷Earnings over 12 -Month Period: $1 = Price/Earnings Ratio: 10 Thus, $10 ÷ $1 = 10 . Plain EnglishThe price/earnings ratio is the ratio of a stock's current price relative to ... every $10 of your investment. The convenience store, however, will make $1 for every $8 you put into it (1, 000 ÷ 10 0 = 10 : 1 versus 2,500 ÷ 200 = 8 :1) . While the convenience store is moreexpensive, ... is going to have a hard time convincing investors that the stock willpay $10 in dividends in the next two quarters if the last two quarters showed dividends of only $1 per share. However, since...