The price-earnings multiple reflects the growth prospects and riskiness of a firm.

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The price-earnings multiple is a valuation ratio that reflects the market's expectations for a company's future earnings growth and riskiness. A higher multiple indicates that investors are willing to pay more for each dollar of the company's earnings, which suggests that they expect strong growth and low risk in the future. Conversely, a lower multiple suggests that investors are more cautious about the company's future earnings potential and risk profile. Therefore, the price-earnings multiple is a key factor in analyzing a company's valuation and investment potential.

The Price-Earnings Multiple Reflects the Growth Prospects and Riskiness of a Firm