Learn how to calculate earnings per share (EPS) and why it is an important gauge in determining a stock’s value and the profitability of a company.

Derived by economists Myron Scholes, Robert Merton, and the late Fischer Black, the Black-Scholes Formula ... price of the call option, C, is equal to a fraction—N(d 1)—of the stock's current ...

Current price / most recent earnings per share = P/E ratio. Earnings per share (EPS) is the amount of a company’s profit allocated to each outstanding share of a company’s common stock.