Because of its relationship to dividends and market price,which ratio is important to investors?
A)Current ratio
B)Debt-to-equity ratio
C)Price/earnings ratio
D)Asset turnover ratio

Question

Quizplus · Accepted Answer

The price/earnings ratio is important to investors because it tells them how much they are paying for each dollar of earnings. It is a way for investors to compare the market price of a company to its earnings potential. A high P/E ratio could indicate that a company is overvalued, while a low P/E ratio could indicate that a company is undervalued. This ratio is also important to investors because it can help them determine the potential for future dividends.

Because of Its Relationship to Dividends and Market Price,which Ratio