Which of the following valuation methods tends to value stocks more highly than the others in the list because it considers expected earnings?

Question

Quizplus · Accepted Answer

P/E multiple takes into account the expected earnings of the company and assigns a multiple to them to arrive at a valuation. This tends to value stocks more highly than liquidation value and book value, as they do not take into account earnings potential. Present value of the interest is not relevant to valuing stocks.

Which of the Following Valuation Methods Tends to Value Stocks