Low P/E Stocks Are Generally Associated With

question 74

Multiple Choice

Low P/E stocks are generally associated with:

• A) mature companies.
• B) cyclical companies.
• C) young fast-growing companies.
• D) growth companies.

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Definitions:

Weighted Average

A calculation that takes into account both the quantity and the significance of each item in a set to find an average that is influenced by the size or weight of each component.

Preferred Shares

A class of ownership in a corporation that has a higher claim on its assets and earnings than common shares, often with fixed dividends and no voting rights.

Basic Earnings

Basic earnings typically refers to the net income of a company, calculated before any effects of preferred dividends, divided by the weighted average number of common shares outstanding.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue, indicating the company's financial performance over a period.