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Which one of the following statements about the price-earnings (P/E) ratio is true? A. A company with high growth opportunities ordinarily has a high P/E ratio. B. A P/E ratio has more meaning when a firm has losses than when it has profits. C. A P/E ratio has more meaning when a firm has abnormally low profits in relation to its asset base. D. A P/E ratio expresses the relationship between a firm’s market price and its net sales. |