Quiz Ch 04 – T/F P/E Ratio and Investor Perception

Fundamentals of Financial Management, Concise

Brigham and Houston

09th Edition

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True or false: The price/earnings (P/E) ratio indicates the price investors are willing to pay for one dollar of present earnings. Typically, investors consider companies with higher P/E ratios to be less risky and/or have greater potential for future growth.

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