Which of the following statements regarding the PE ratio is true? A high PE ratio is indicative of a company with questionable future earnings. O The higher the PE ratio the greater the risk. A low PE ratio reflects a company with a strong financial future. The lower the PE ratio the greater the risk.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Which of the following statements regarding
the PE ratio is true?
O A high PE ratio is indicative of a company with
questionable future earnings.
The higher the PE ratio the greater the risk.
O A low PE ratio reflects a company with a strong
financial future.
O The lower the PE ratio the greater the risk.
Transcribed Image Text:Which of the following statements regarding the PE ratio is true? O A high PE ratio is indicative of a company with questionable future earnings. The higher the PE ratio the greater the risk. O A low PE ratio reflects a company with a strong financial future. O The lower the PE ratio the greater the risk.
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