Which of the Following Statements Regarding the Price/earnings Ratio Is

question 191

Multiple Choice

Which of the following statements regarding the price/earnings ratio is incorrect?

• A) The price/earnings ratio represents the market price of one share of common stock.
• B) A price/earnings ratio of 9.2 implies that the company's stock is selling at 9.2 times one year's earnings per share.
• C) A higher price/earnings ratio signifies a higher return on investment.
• D) The price/earnings ratio is most useful when comparing one company to another.

---

Definitions:

Clergy

Ordained leaders of a religious faith, responsible for overseeing religious services and providing spiritual guidance.

Center of Influence

An individual or entity that possesses significant sway or authority within a community, often used in marketing to access broader networks.

Day Care Center

A facility that offers care and educational activities for young children during the day while their guardians are at work or otherwise engaged.

Pediatricians

Medical doctors specializing in the care and treatment of infants, children, and adolescents, focusing on their physical, emotional, and developmental health.