True concerning the price-earnings ratio

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Which one of the following statements is true concerning the price-earnings (PE) ratio? a) PE ratios are unaffected by the accounting methods employed by a firm. b) The PE ratio is classified as a profitability ratio. c) The PE ratio is a constant value for each firm. d) A high PE ratio may indicate that a firm is expected to grow significantly. e) A PE ratio of 16 indicates that investors are willing to pay $1 for every $16 of current earnings.

Reference no: EM131185295

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