Compare this yield with normal return for stocks

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Question: In the late 1990s, PIE ratios were high by historical standards. The P/E ratio for the S&P 500 stocks was as high as 33 in 1999. In the 1970s it was 8. What do you think would be a "normal" P/E ratio-that is, where multiples higher than normal could be called "high" and multiples less than normal could be called "low"? The P/E ratio is the inverse of the E/P ratio, sometimes called the earnings yield. Compare this yield with normal return for stocks of about 10 percent.

Reference no: EM131486920

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