Respuesta :
Price-earnings ratio is the multiplier used to multiply earnings per share in order to calculate the common stock's current worth.
The price-to-earnings ratio evaluates the current share price in relation to the company's earnings per share (EPS). Other names for the price-to-earnings ratio include the price multiple and the earnings multiple.
Investors and analysts use Price-earnings ratio to evaluate a company's shares fairly in an apples-to-apples comparison. A company's performance can also be evaluated against its prior performance, and aggregate markets can common stock's be contrasted with one another or through time.
One of the methods that analysts and investors most frequently use to assess a stock's relative value is the price-to-earnings ratio (P/E). The P/E ratio aids in identifying common stock's an undervalued or expensive stock. The P/E ratio of a firm may also be compared to those of similar companies' equities or to the market as a whole, such as the S&P 500 Index.
Learn more about Price-earnings ratio here
https://brainly.com/question/15520260
#SPJ4
