Start networking and exchanging professional insights

Register now or log in to join your professional community.

Follow

Which would you prefer as an investment?

Tow companies are identical in earnings, growth prospects, leverage, returns on capital, and risk. Company A is trading at a15 P/E multiple, while the other trades at10 P/E.

user-image
Question added by Ihab El Mortada , Business Development Manager , Fookis Labs
Date Posted: 2014/04/26
Taimoor Khan
by Taimoor Khan , Business Partner , Britannia International

As an investor you will expect to pay lower for every dollar you make, therefore,10P/E

Ihab El Mortada
by Ihab El Mortada , Business Development Manager , Fookis Labs

10 P/E: A rational investor would rather pay less per unit of ownership.

More Questions Like This