Low P/E ratios tend to indicate that a company will _______, ceteris paribus.

Question

Quizplus · Accepted Answer

Low Price-to-Earnings (P/E) ratios often indicate that investors expect slower growth from a company, as the P/E ratio measures a company's current share price relative to its per-share earnings. A low P/E might suggest that the company is undervalued or that it is expected to experience slower earnings growth or face higher risks compared to companies with higher P/E ratios.

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