What Does a Low P/E for a Stock Indicate

question 122

Multiple Choice

What does a low P/E for a stock indicate?

• A) People may expect earnings to fall in the future perhaps because the firm will be faced with increased competition.
• B) Its dividends have been low so that no one is willing to pay very much for it.
• C) The corporation is possibly overvalued.
• D) It is always a good time for buying the company's stock.

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Definitions:

Certificate Of Deposit

A Certificate of Deposit (CD) is a financial product offered by banks and credit unions that provides an interest rate premium in exchange for the customer agreeing to leave a lump-sum deposit untouched for a predetermined period of time.

Multiple Endorsements

Refers to the practice in banking and finance where a document, such as a check, is signed over to another party multiple times.

Liable

Being legally responsible for something, typically referring to obligations in law.

Primary Liability

The direct and immediate responsibility to fulfill an obligation or repay a debt, without necessarily having recourse against others for reimbursement.