Which One Of The Following Statements Is True Concerning The Price-Earnings (Pe) Ratio?

(Correct Answer Below)

Which One Of The Following Statements Is True Concerning The Price-Earnings (Pe) Ratio?

Answers: A high PE ratio may indicate that a firm is expected to grow significantly. A PE ratio of 16 indicates that investors are willing to pay $1 for every $16 of current earnings. PE ratios are unaffected by the accounting methods employed by a firm. The PE ratio is classified as a profitability ratio. The PE ratio is a constant value for each firm.
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A high PE ratio may indicate that a firm is expected to grow significantly.

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