Seeing is believing!
Before you order, simply sign up for a free user account and in seconds you'll be experiencing the best in CFA exam preparation.
Basic Question 7 of 11
A company with a high P/E ratio is expected to ______
B. underperform the market.
C. grow faster than the market.
A. go bankrupt.
B. underperform the market.
C. grow faster than the market.
User Contributed Comments 1
| User | Comment |
|---|---|
| khalifa92 | the dividends displacement of earnings phenomenon |
Thanks again for your wonderful site ... it definitely made the difference.
Craig Baugh
Learning Outcome Statements
explain the rationale for using price multiples to value equity, how the price to earnings multiple relates to fundamentals, and the use of multiples based on comparables
calculate and interpret the following multiples: price to earnings, price to an estimate of operating cash flow, price to sales, and price to book value
CFA® 2025 Level I Curriculum, Volume 3, Module 8.