CORRECT ANSWER A. THE PRICE/EARNINGS (P/E) RATIO EXPRESSES THE R...

79.

Correct answer a. The price/earnings (P/E) ratio expresses the relationship between the market

price of a stock and the stock’s earnings per share. A steady drop in a firm’s P/E ratio could,

therefore, indicate that earnings per share has been increasing while the market price of the stock

has held steady.