Last year the price per share of Stock N increased by a percent and the earnings per share of Stock N increased by b percent, where a is greater than b. By what percent did the ratio of price per share to earnings per share increase, in terms of a and b? Select.
A) 100*(a-b) %
B) 100*(a-b)/(100+b) %
C) (100+b) %
D) (a-b)/(100+b) %
E) a/b %
Let P = the old price per share; E = the old earning per share. Thus P/E is the price to earning ratio before the increases   After the increase the new price is: P*(1+a/100) and the new earning is: E*(1 +b/100)   The new P/E is: (1+a/100)P/(1+b/100)E   The Percent of P/E increase = (new P/E - P/E)/(P/E). Subsititute new P/E to the equation we have:   [(1+a/100)/(1+b/100)*P/E - P/E]/(P/E)*100%. Simplifly the expression and you should get the answer to be:   100*(a-b)/(100+b) %   Answer : 100*(a-b)/(100+b) %
<result>B</result>
Last year the price per share of Stock N increased by a percent and the earnings per share of Stock N increased by b percent, where a is greater than b. By what percent did the ratio of price per share to earnings per share increase, in terms of a and b?