Which of the following statements about the priceearnings, Ask an Expert

Economics

Which of the following statements about the price/earnings ratio is false?

A. The price/earnings ratio is a constant relationship for most companies.

B. A high price/earnings ratio indicates investors have high confidence in the future potential of the company.

C. It is more useful to compare a company's price/earnings ratio to a competitor's ratio or the industry average ratio.

D. The price/earnings ratio is computed by dividing the market price of stock by the earnings per share

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M970027

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