Which of the following factors do not influence the firm's P/E ratio?
A) Past earnings
B) Shares outstanding
C) Volatility in business performance
D) All of the options influence the firm's P/E ratio.

Question

Quizplus · Accepted Answer

All the options listed (past earnings, shares outstanding, and volatility in business performance) influence a firm's Price-to-Earnings (P/E) ratio. Past earnings affect investor expectations for future earnings, shares outstanding impact earnings per share, and volatility in business performance can affect risk perceptions and future earnings predictability, all of which are factors in determining a firm's P/E ratio.

Which of the Following Factors Do Not Influence the Firm's