Which of the following contributes to high P/E ratios?
A)high dividend payout ratios
B)high rate of earnings growth
C)periods of high inflation
D)high debt ratios

Question

Quizplus · Accepted Answer

A high rate of earnings growth leads to an increase in the stock's price, which results in a higher P/E ratio. Higher dividend payout ratios, periods of high inflation, and high debt ratios do not necessarily contribute to high P/E ratios.

Which of the Following Contributes to High P/E Ratios