The price/earnings ratio is an indication of how much investors are willing to pay for a dollar of the company's earnings.

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The price/earnings ratio, also known as P/E ratio, measures the market value of a company's stock relative to its earnings per share. It is calculated by dividing the current market price of the stock by the earnings per share (EPS) of the company. A high P/E ratio indicates that investors are willing to pay more for each dollar of the company's earnings, while a low P/E ratio suggests that the stock may be undervalued.

The Price/earnings Ratio Is an Indication of How Much Investors