I agree with the other poster. The straight forward way to view...

I agree with the other poster. The straight forward way to view this issue is to look at EPS. It is not necessary to complicate it by adding or deducting interest or dividends.

Say that share XYZ, with a market value of $1 has an EPS of $0.10, therefore it is trading on a PE ratio of 10. (PE being price/earnings). If the market value remains at $1, and share XYZ has an EPS of $0.05, then it is trading on a PE of 20.

Hope that this has clarified my earlier post.