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

Name: If we view price-earnings (P/E) ratios as measures of payback, all else equal, higher earnings multipliers are better.
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Higher P/E ratios indicate that investors are paying more for each unit of income, suggesting a longer payback period, not necessarily a better investment. Lower P/E ratios can indicate a quicker payback on investment, assuming earnings remain constant.

If We View Price-Earnings (P/E) Ratios as Measures of Payback