Which of the Following Statements Is False

question 29

Multiple Choice

Which of the following statements is false?

• A) We can estimate the value of a firm's shares by multiplying its current earnings per share by the average P/E ratio of comparable firms.
• B) For valuation purposes, the trailing P/E ratio is generally preferred, since it is based on actual, not expected, earnings.
• C) Forward earnings are the expected earnings over the coming 12 months.
• D) Trailing earnings are the earnings over the previous 12 months.