P/E Ratio Effect
(1) Why do you think some of the stocks had so high P/E ratios?
(2) Given the fact that firms with high P/E ratio firms have more growth opportunities than low P/E ratio firms, if other things remain the same, would you buy high P/E ratio firms or low P/E ratio firms, or are you indifferent?
High Price-to-Earnings Ratio Paper Student's Name Professor's Name Affiliation Date
High Price-to-Earnings Ratio Price-to-Earnings ratio (P/E ratio) is a tool used to assess stock performance. Its importance of is often overstated by most novice investor, who misinterpret results as a clear indication of company success (Staff, 2014). Price-to-Earnings ratio is calculated by diving share per with the earning per share (EPS). As such, a high P/E ratio created by a...
Excerpt from file: RunningHeader:HIGHPRICETOEARNINGSRATIO 1 P/ERatioEffect (1)WhydoyouthinksomeofthestockshadsohighP/Eratios? (2)GiventhefactthatfirmswithhighP/Eratiofirmshavemoregrowthopportunities thanlowP/Eratiofirms,ifotherthingsremainthesame,wouldyoubuyhighP/Eratio firmsorlowP/Eratiofirms,orareyouindifferent?
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