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The most common equity multiple in stock valuation, because it is simple to calculate, is the:
APrice to premises ratio
BPrice to petrol ratio
CPrice to earnings ratio
DPrice to postage ratio
Answer & Solution
Correct answer: C. Price to earnings ratio
1. All the data needed is readily available.
2. It appears on every finance site.
3. It is the price to earnings ratio.
_Source: OpenStax Principles of Finance 2e, Chapter 11, Stocks and Stock Valuation._
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