Asked by Ashley Combs on May 07, 2024
Verified
A high price/earnings ratio usually indicates the market is optimistic about the company's future earnings potential.
Price/Earnings Ratio
A valuation ratio of a company's current share price compared to its per-share earnings, used to evaluate a company's financial health and growth prospects.
- Perceive the connection between net income and different financial metrics.
Verified Answer
ZK
Zybrea KnightMay 07, 2024
Final Answer :
True
Explanation :
A high price/earnings ratio means that investors are willing to pay a premium for the company's stock, which indicates they believe the company will experience significant earnings growth in the future.
Learning Objectives
- Perceive the connection between net income and different financial metrics.
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