As the Market's Return on Equity Increases So Will the P/E

question 214

True/False

As the market's return on equity increases so will the P/E ratio.

---

Definitions:

Net Income

The financial gain of a company post deduction of taxes and all costs from its revenue.

Common Shares

Equity securities that represent ownership in a corporation, providing voting rights and a share in the company's profits through dividends.

Basic Earnings

Typically refers to basic earnings per share, which is a measure of the amount of profit attributable to each outstanding share of a company's common stock.

Reacquired

Refers to assets or securities that have been repurchased or bought back by the company that originally issued them.