Which of the following indicates the amount investors are willing to pay per dollar of earnings?
A)Market price per share of a company's stock
B)Earnings per share
C)Price-earnings ratio
D)Return on total assets

Question

Quizplus · Accepted Answer

Price-earnings ratio (P/E ratio) is a valuation ratio that indicates the amount investors are willing to pay per dollar of earnings. It is calculated by dividing the market price per share of a company's stock by the earnings per share. A higher P/E ratio indicates that investors are willing to pay more per dollar of earnings, which may indicate expectations of higher growth or profitability in the future.

Which of the Following Indicates the Amount Investors Are Willing