The P/E Ratio Approach to Stock Valuation Is Based On

question 67

Multiple Choice

The P/E ratio approach to stock valuation is based on:

• A)a yearly range of historical P/E ratios resulting in an average expected P/E ratio, an earnings forecast derived from expected growth rates in earnings, and the stock's current P/E ratio.
• B)the average yearly P/E ratio, relative to the market; a yearly range of P/E ratios; and earnings based on an assumed constant growth rate.
• C)an increasing yearly range of P/E ratios and an earnings forecast based on the EPS of previous years.
• D)The current P/E ratio, compared to the P/E ratio of some market index.

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