Multiple Choice
Which of the following statements about the Price/Earnings ratio is not correct?
A) The Price/Earnings ratio indicates how much investors are willing to pay for a share of a company's stock as a multiple of current earnings.
B) A high Price/Earnings ratio may mean that investors have pushed the price of the stock up in anticipation of higher future net income.
C) If EPS decreases and there is no change in the market price of the stock,the Price/Earnings ratio will decrease.
D) If the market price of the stock increases and there is no change in EPS,the Price/Earnings ratio will increase.
Correct Answer:
Verified
Correct Answer:
Verified
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