How would you explain P/E ratio differences among companies? By differences in investor:
A) expectations about the future growth of the market.
B) estimates of the recent growth of earnings.
C) expectations about the future growth of earnings.
D) estimates about the recent growth of dividends.

Question

Quizplus · Accepted Answer

The P/E ratio reflects investor expectations about a company's future earnings growth. A higher P/E ratio often indicates that investors expect higher future growth in earnings.

How Would You Explain P/E Ratio Differences Among Companies? by Differences