In the Price/earnings Approach to Stock Valuation

question 25

Multiple Choice

In the price/earnings approach to stock valuation,

• A) historical stock prices are utilized.
• B) forecasted EPS are typically used.
• C) the P/E ratio is computed by multiplying the stock price by the earnings per share.
• D) the market P/E ratio, adjusted by beta, is used to value individual stocks.

---

Definitions:

Interactive

Involving communication or direct involvement with someone or something, which changes or has an effect upon contact.

Panic Attack

is an abrupt onset of intense fear or discomfort, marked by physical and psychological symptoms such as rapid heartbeat and feelings of dread.

Affective Disorder

A psychological disorder characterized by a consistent, pervasive alteration in mood that affects thoughts, emotions, and behavior.

Rapid Breathing

Breathing that is quicker than normal, often a symptom of anxiety, excitement, or physical exertion.