Multiple Choice
Suppose Sarah Lee Corporation stock has a P/E ratio of 8. Which of the following best describes this P/E ratio?
A) The P/E ratio is low, indicating that buyers may expect earnings to rise.
B) The P/E ratio is low, indicating that buyers may expect earnings to fall.
C) The P/E ratio is high, indicating that buyers may expect earnings to rise.
D) The P/E ratio is high, indicating that buyers may expect earnings to fall.
Correct Answer:
Verified
Correct Answer:
Verified
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