Company X Has a P/E Ratio of 16 in Year

question 102

Multiple Choice

Company X has a P/E ratio of 16 in year 2013 and 16.5 in 2014.In 2015,its P/E ratio is 24.The best way to interpret these data is to conclude that:

• A) the stock is overpriced and should be sold.
• B) the stock has great growth capacity and should be bought.
• C) other financial results and news should be examined to determine the cause of the P/E ratio change.
• D) the stock is underpriced and should be bought.

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Definitions:

Job Descriptions

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Ontario Pay Equity Act

Legislation in Ontario, Canada, aimed at eliminating gender wage gaps by ensuring that female-dominated job classes are paid at least equally to male-dominated classes performing work of equal value.

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