An inconsistency between a stock's P/E ratio and growth rate can be attributed to all of the following,except A) A major difference in the risk involved. B) Inaccurate growth estimates. C) An undervaluation of the stock. D) An overvaluation of the stock. E) Competition.

Question

Quizplus · Accepted Answer

Competition is not directly related to the inconsistency between a stock's P/E ratio and its growth rate. The other options can directly affect the perceived value or growth estimates of a stock, leading to inconsistencies.

An Inconsistency Between a Stock's P/E Ratio and Growth Rate