The PE ratio measures the price that investors are prepared

The P/E ratio measures the price that investors are prepared to pay for each dollar of earnings.

True

False

Solution

True

P/E ratio shows how much investor is ready to pay for 1$ of earning. It is calculated as under :

PE ratio = Market price per share/ Earning per share

The P/E ratio measures the price that investors are prepared to pay for each dollar of earnings. True FalseSolutionTrue P/E ratio shows how much investor is rea

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