Which One of the Following Is a Limitation of the P/E

question 100

Multiple Choice

Which one of the following is a limitation of the P/E ratio?

• A) Easy way to estimate the price of a firm
• B) It compares the performance of stocks
• C) Ignores the magnitude or the sign of the earnings
• D) One of the most widely used relative pricing methods

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Definitions:

Organizational Stories

Are narratives shared among members of an organization that embody its values, history, and culture.

Performance Standards

The expected levels of performance that set the benchmarks for quality or success in work tasks or goals.

Organizational Culture

The shared values, beliefs, and practices that shape the behavior and attitudes of individuals within an organization, influencing its functioning and performance.

Social Control

Mechanisms, strategies, and structures within a society or group to regulate individual behavior and maintain social order.