If a company's P/E is 20 and its industry's mean P/E is 15,the company is considered to be

Question

Quizplus · Accepted Answer

If a company's P/E is higher than its industry's mean P/E, it indicates that the market has higher expectations for its future earnings growth. This can result in an overvalued stock price. In this case, the company's P/E of 20 is higher than the industry's mean P/E of 15, suggesting that the company is overvalued. Therefore, the best choice is A.

If a Company's P/E Is 20 and Its Industry's Mean