If a company's P/E is 20 and its industry's mean P/E is 15,the company is likely considered to be

Question

Quizplus · Accepted Answer

A P/E ratio higher than the industry mean suggests that investors are willing to pay more for the company's earnings, which implies a higher expected growth rate in the future. This may be reasonable for some high-growth companies, but if the P/E is significantly higher than the industry average, it may indicate that the stock is overvalued and due for a correction.

If a Company's P/E Is 20 and Its Industry's Mean