What Does a High Price/earnings Ratio Indicate

question 208

Multiple Choice

What does a high price/earnings ratio indicate?

• A) Either the stock is undervalued or people have become more optimistic about the corporation's prospects.
• B) Either the stock is overvalued or people have become more optimistic about the corporation's prospects.
• C) Either the stock is overvalued or people have become less optimistic about the corporation's prospects.
• D) Either the stock is undervalued or people have become less optimistic about the corporation's prospects.

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