Which of the following factors will influence a firm's P/E ratio?
A) The investors' required rate of return
B) Firm investment opportunities
C) General market conditions
D) All of the above

Question

Quizplus · Accepted Answer

All of the above factors influence a firm's P/E ratio. Investors' required rate of return affects the earnings portion of the ratio, firm investment opportunities affect the growth potential of the company, and general market conditions will affect both earnings and growth potential.

Which of the Following Factors Will Influence a Firm's P/E