Over long periods of time,the average P/E ratio of firms in the U.S.stock market is closest to ________.

Question

Quizplus · Accepted Answer

Historically, the average P/E ratio of firms in the U.S. stock market has been around 15-20, meaning that the price of a stock is roughly 15-20 times its earnings per share (EPS). While the ratio can vary widely among individual companies or industries, the overall market tends to have an average P/E ratio in this range. Therefore, choice C)20 is the closest answer.

Over Long Periods of Time,the Average P/E Ratio of Firms