Which One of the Following Is a Limitation of the P/E

question 74

Multiple Choice

Which one of the following is a limitation of the P/E ratio?

• A)Easy way to estimate the price of a firm
• B)It compares the performance of shares
• C)Ignores the magnitude or the sign of the earnings
• D)One of the most widely used relative pricing methods

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Definitions:

Intercostal Spaces

The anatomical spaces between the ribs that contain muscles, nerves, and blood vessels, important in respiration.

Accessory Muscles

Additional muscles used for increased effort in breathing, particularly when the primary muscles are not sufficient.

Tactile Fremitus

The palpable vibration felt on the chest wall when a person speaks, used in medical examination to assess the condition of the lungs and pleura.