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A ratio built on projected future earnings is described as a:
AForeign ratio
BFormal ratio
CFounded ratio
DForward ratio
Answer & Solution
Correct answer: D. Forward ratio
1. It is also called the leading or estimated version.
2. Projections replace actual figures.
3. It is a forward ratio.
_Source: OpenStax Principles of Finance 2e, Chapter 11, Stocks and Stock Valuation._
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