If we view P/E ratios as measures of payback, all else equal, higher earnings multipliers are better.

Name: If we view P/E ratios as measures of payback, all else equal, higher earnings multipliers are better.
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Question

Quizplus · Accepted Answer

Higher P/E ratios indicate that investors are willing to pay more for each dollar of earnings, which could mean the stock is overvalued or expected to grow significantly, not necessarily better.

If We View P/E Ratios as Measures of Payback, All