The growth rate of dividends and profit margin are the main determinants of the P/E ratio.

Name: The growth rate of dividends and profit margin are the main determinants of the P/E ratio.
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Question

Quizplus · Accepted Answer

The P/E ratio is primarily determined by market expectations of future earnings growth and risk, not directly by the growth rate of dividends or profit margin. Factors such as interest rates, investor sentiment, and overall market conditions also significantly influence the P/E ratio.

The Growth Rate of Dividends and Profit Margin Are the Main