If an investor states that Commercial Bank is undervalued at 15 times, he is referring to the:

Question

Quizplus · Accepted Answer

The investor is referring to the earning multiple, also known as the price-to-earnings (P/E) ratio, which compares a company's current share price to its per-share earnings. Saying a bank is undervalued at 15 times suggests the investor believes the P/E ratio indicates the stock is a good buy at its current earnings multiple.

If an Investor States That Commercial Bank Is Undervalued at 15