Series 79: Price/Earnings Ratio

Taken from our Series 79 Top-off Online Guide

Price/Earnings Ratio

As we noted earlier, the price/earnings (P/E) ratio is the market price of the security divided by EPS. The P/E ratio is essentially the same as the ratio of market capitalization (or equity value) to net income. P/E is very useful for comparing the growth expectations built into st

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