A forward PE is generally based on the projected:
A)average earnings for the next five years.
B)average earnings for the next three years.
C)earnings for the upcoming quarter.
D)earnings for the next year.
E)stock price in one year.

Question

Quizplus · Accepted Answer

A forward PE ratio is a measure of stock valuation that is based on the projected earnings for the next year. It is calculated by dividing the current stock price by the estimated earnings per share for the next 12 months. Therefore, option D (earnings for the next year) is the best choice for this question.

A Forward PE Is Generally Based on the Projected