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Basic Question 6 of 11
Which of the following variables is most closely watched by investors?
B. Earnings valuation stock price
C. P/E ratio
D. Book value
E. Asset value
A. Dividend valuation stock price
B. Earnings valuation stock price
C. P/E ratio
D. Book value
E. Asset value
User Contributed Comments 6
| User | Comment |
|---|---|
| Creep | What relevance does this have?! |
| johntan1979 | I'm pretty sure you won't ask what relevance does this have during the actual exam. |
| farhan92 | if an earnings report comes out websites are more likely to provide a P/E figure than the rest. |
| ascruggs92 | Creep are you serious or just trolling everyone? |
| khalifa92 | P/E ratio is mostly cited by media and analysts. |
| MathLoser | Keep in mind that P/E stands alone mean nothing. You have to compare it with the industry's P/E and the rival companies'. |
Thanks again for your wonderful site ... it definitely made the difference.
Craig Baugh
Learning Outcome Statements
explain the rationale for using price multiples to value equity, how the price to earnings multiple relates to fundamentals, and the use of multiples based on comparables
calculate and interpret the following multiples: price to earnings, price to an estimate of operating cash flow, price to sales, and price to book value
CFA® 2024 Level I Curriculum, Volume 3, Module 8.