When comparing similar firms, a high P/E ratio is often viewed as an indication that a stock is ________ .

Name: When comparing similar firms, a high P/E ratio is often viewed as an indication that a stock is ________ .
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Question

Quizplus · Accepted Answer

A high P/E ratio suggests that investors expect higher earnings growth in the future compared to firms with a lower P/E ratio, which can lead to the perception that the stock is overpriced relative to its earnings.

When Comparing Similar Firms, a High P/E Ratio Is Often