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The price-earnings ratio is sometimes used as an indicator to Select one: O a. buy shares b. all of the choices C. sell share
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Answer #1

Answer : B = All of the choices.

Price earning ratio = ( Market price of share / Earning per share ).

P/E Ratio used to compare market price with companies earning.

After calculating P/E Ratio investor can know whether stock price is over valued or undervalued.

Investors will deside whether to sell if over valued , to buy if under valued, to hold if priced correctly.

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