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• The price of the company's products relative to how much they earn on the sale of those products
• A company's stock price relative to its earnings. Higher growth companies have higher P/E ratios
• The prices paid for goods relative to how much the company earns on those goods
• The ability of a company to pay dividends
Option2 is the right answer.
I THINK IT'S ANSWER IS "B"
BECAUSE P/E RATIO IS RELATING WITH STOCK WITH RESPECT OF ITS MARKET PRICE.
MOSTLY THIS RATIO IS USING INVESTORS.
ITS EASILY TO UNDERSTAND OR ANALYZE HOW MUCH THEY PAY FOR A STOCK BASED ON ITS CURRENT RATIO
(ITS MY OPINION) THANK YOU
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THE RIGHT ANSWER IS THE OPTION B
Option2 is the correct answer...........
A company's stock price relative to its earnings. Higher growth companies have higher P/E ratios.
P/E Ratio determines the decision of investors about how much they can earn against the price paid by them against purchase of shares of such company.
Option2 is correct
it is common practice for investors to use the price-to-earnings ratio (P/E ratio or price multiple) to determine if a company's stock price is over or undervalued. Companies with a high P/E ratio are typically growth stocks.
It is the price you pay for every dollar of earning. For example if a company has earnings of10 dollars (per share) and the share is traded at30, Then the P/E ratio is3, you would be paying3 dollars for each dollar of earnings.
Performance of shares with respect to the market price, this can consider as investment ratio or performance ratio
