Shares with a price-earnings ratio greater than 20 to 25 are likely to be underpriced.

Name: Shares with a price-earnings ratio greater than 20 to 25 are likely to be underpriced.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A price-earnings ratio greater than 20 to 25 indicates that the stock is relatively expensive compared to its earnings. Therefore, it is more likely to be overpriced rather than underpriced. A lower price-earnings ratio may indicate that the stock is undervalued and therefore could be considered underpriced.

Shares with a Price-Earnings Ratio Greater Than 20 to 25