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28 April, 16:55

Which of the following is not true of P/E ratios? (Ignore option e.) a. It is calculated by dividing the stock price by EPS b. It can show whether a stock is under or overvalued c. Can be used to compare similar companies but not companies from different industries d. All of the above are true. e.

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  1. 28 April, 17:25
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    The correct answer is letter "D": All of the above are true.

    Explanation:

    The Price-to-Earnings (P/E) ratio represents the relationship between a company's stock share price related to its earnings per share (EPS). The P/E ratio can give investors an idea if a company's share price is undervalued or overvalued. Besides, P/E ratios of companies with similar businesses can be compared to measure firms' performances.
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