This refers to the relationship between a company`s stock price and earnings per share.a.Liquidity Ratiob.Price-Earnings Ratioc.Solvency Ratiod.Acid Test Ratio
Question
This refers to the relationship between a company`s stock price and earnings per share.a.Liquidity Ratiob.Price-Earnings Ratioc.Solvency Ratiod.Acid Test Ratio
Solution
The correct answer is b. Price-Earnings Ratio. This ratio is used to evaluate the relationship between a company's stock price and its earnings per share. It is calculated by dividing the market value per share by the earnings per share (EPS). A high P/E ratio could mean that a company's stock is over-valued, or else that investors are expecting high growth rates in the future. Conversely, a low P/E might indicate that the company is undervalued or that investors are expecting
Similar Questions
This ratio shows the market`s expectations and is the price you must pay per unit of current earnings.a.Solvency Ratiob.Price-Earnings Ratioc.Liquidity Ratiod.EBITDA Multiple
This is the ratio for valuing a company that measures its current share price relative to its earnings per share.a.Dividend Yield per Shareb.EBITA multiplec.Book to Market Ratiod.Price to Earnings Ratio
The acid-test ratio is a measure of a company's:a.Liquidityb.Profitabilityc.Solvencyd.Efficiency
Fill in the Blank QuestionFill in the blank question.Price-earnings ratio is equal to the price of a share of stock divided by the corporation's per of stock.
The ………….. ratios provide the information critical to the long run operation of the firm.a.Liquidityb.Profitabilityc.Solvencyd.Activity
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.