Which of the following statements regarding the price/earnings ratio (P/E ratio) is false?
A) The P/E ratio is a measure of a stock's relative price.
B) P/E ratios should be compared among firms in the same industry.
C) P/E ratios for most corporations have ranged between 5 and 10.
D) A relatively low P/E ratio indicates that investors expect sluggish growth or an uncertain future.
Correct Answer:
Verified
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