Which of the following statements regarding P/E multiple is NOT correct? Group of answer choices A stock with a low P/E multiple indicates that the stock is undervalued. A firm's risk does not affect its P/E multiple. Two statements are NOT correct. A firm’s high P/E multiple may be attributed to a temporary decrease in its EPS. A firm’s growth potential affects its P/E multiple.
Which of the following statements regarding P/E multiple is NOT correct? Group of answer choices A stock with a low P/E multiple indicates that the stock is undervalued. A firm's risk does not affect its P/E multiple. Two statements are NOT correct. A firm’s high P/E multiple may be attributed to a temporary decrease in its EPS. A firm’s growth potential affects its P/E multiple.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Which of the following statements regarding P/E multiple is NOT correct?
Group of answer choices
A stock with a low P/E multiple indicates that the stock is undervalued.
A firm's risk does not affect its P/E multiple.
Two statements are NOT correct.
A firm’s high P/E multiple may be attributed to a temporary decrease in its EPS.
A firm’s growth potential affects its P/E multiple.
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