High P/E ratios tend to indicate that a company will _______,ceteris paribus.
A)grow quickly
B)grow at the same speed as the average company
C)grow slowly
D)not grow
E)none of the above

Question

Quizplus · Accepted Answer

High P/E ratios typically indicate that investors are willing to pay a premium for the company's earnings growth potential. This could suggest that the company is expected to grow quickly in the future, all else being equal.

High P/E Ratios Tend to Indicate That a Company Will