Notice: Payments for answers will end 4/10/2017. Click for more info.
You have new items in your feed. Click to view.
Question and answer
Q: Suggest which stock ratio indicates to an investor that the risk related to a stock is high. Provide support for your rationale.
A: The price-to-earnings ratio (P/E ratio) is calculated as a stock's current share price divided by its earnings per share (EPS) for a twelve-month period (usually the last 12 months, or trailing twelve months (TTM)). [ Most of the P/E ratios you see for publicly-traded stocks are an expression of the stock's current price compared against its previous twelve months' earnings. A stock trading at
$40/share with an EPS (ttm) of $2 would have a P/E of 20 ($40/$2), as would a stock priced at $20/share with an EPS of $1 ($20/$1). These two stocks have the same price-to-earnings valuation - in both cases investors pay $20 for each dollar of earnings. But, what if a stock earning $1 per share was trading at $40/share? Now we'd have a P/E ratio of 40 instead of 20, which means the investor would be paying $40 to claim a mere $1 of earnings. This seems like a bad deal, but there are several factors which could mitigate this apparent overpricing problem. ]
Expert answered|howareyou|Points 135|
Question
Asked 6/1/2013 9:17:07 PM
0 Answers/Comments
Get an answer
New answers
Rating

There are no new answers.

Comments

There are no comments.

Add an answer or comment
Log in or sign up first.
26,443,097 questions answered
Popular Conversations
What is the solution to the proportion? n/18 = 5/9 A. n = 2.5 B. n ...
Weegy: n/18 = 5/9; 9n = 5 * 18 9n = 90 n = 90/9 n = 10
10/12/2017 10:59:55 AM| 8 Answers
Which of the following has kinetic energy? a. a rock poised for a ...
Weegy: A bow that is drawn back by an archer. B. Has kinetic energy.
10/10/2017 2:00:05 PM| 3 Answers
In which sentence is the underlined phrase an adjective ...
Weegy: The sentence with an adjective clause is: User: . In which sentence is the underlined clause an adjective ...
10/10/2017 11:55:36 AM| 2 Answers
What country is John Hus from?
10/11/2017 11:05:31 AM| 2 Answers
The two infinitive functions are adjectives and noun. true or faslse
Weegy: The two infinitive functions are adjectives and noun. TRUE.
10/11/2017 11:35:51 AM| 2 Answers
A baby is usually able to self-feed with soft finger food at about ...
Weegy: A baby is usually able to do some self-feeding with soft finger food at about the age of eight months.
10/11/2017 2:04:19 PM| 2 Answers
Weegy Stuff
S
P
P
L
P
P
P
Points 137 [Total 2029] Ratings 11 Comments 27 Invitations 0 Offline
S
P
L
Points 100 [Total 122] Ratings 0 Comments 100 Invitations 0 Offline
S
Points 77 [Total 77] Ratings 4 Comments 37 Invitations 0 Offline
S
Points 11 [Total 11] Ratings 0 Comments 1 Invitations 1 Offline
S
Points 10 [Total 10] Ratings 1 Comments 0 Invitations 0 Offline
S
Points 2 [Total 2] Ratings 0 Comments 2 Invitations 0 Offline
S
Points 2 [Total 2] Ratings 0 Comments 2 Invitations 0 Offline
S
Points 1 [Total 1] Ratings 0 Comments 1 Invitations 0 Offline
S
Points 1 [Total 1] Ratings 0 Comments 1 Invitations 0 Offline
S
Points 1 [Total 1] Ratings 0 Comments 1 Invitations 0 Offline
* Excludes moderators and previous
winners (Include)
Home | Contact | Blog | About | Terms | Privacy | © Purple Inc.