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Home › Bihar Board Class 12 (Commerce) › Accountancy › Analysis of Financial Statements: Tools and Accounting Ratios › The P/E ratio mainly reflects what?

The P/E ratio mainly reflects what?

AInvestors' growth expectations
BThe firm's cash balance
CDepreciation method used
DThe auditor's opinion
Answer & Solution
Correct answer: A. Investors' growth expectations
A higher multiple shows investors expect the firm's earnings to grow.
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