If GM stock is selling at a P/E ratio greater than the P/E ratio of the market index, the stock has

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Quizplus · Accepted Answer

A stock selling at a P/E ratio greater than the market index typically indicates investors are willing to pay more for each dollar of earnings, often due to expectations of higher earnings growth in the future, not less. This does not necessarily relate directly to the predictability of earnings, cyclicality, or the dividend yield. However, a higher P/E ratio can sometimes imply a lower dividend yield compared to the average company, as companies with higher growth prospects often reinvest earnings rather than pay them out as dividends.

If GM Stock Is Selling at a P/E Ratio Greater