Historically, Stock Returns for Companies with Low P/E Ratios Have

question 43

True/False

Historically, stock returns for companies with low P/E ratios have been better than returns for stocks with high P/E ratios.

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Definitions:

Seasonal Nature

Describes fluctuations in business activity, revenue, or profits at certain times of the year due to seasonal factors such as holidays or weather changes.

Fiscal Year Ends

The completion of a one-year, or 12-month, accounting period after which a company determines its financial performance.

Net Income

Total earnings of a business, arrived at by subtracting all expenses and taxes from its overall income.

Dividends

Payments made to shareholders out of a corporation's profits, reflecting the company's earnings and financial health.