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Firms carrying high P/E ratios are commonly interpreted as:

AGrowth companies
BGround companies
CGrain companies
DGuard companies
Answer & Solution
Correct answer: A. Growth companies
1. Investors pay up for future earnings. 2. That implies earnings are expected to rise. 3. So they are read as growth companies. _Source: OpenStax Principles of Finance, Chapter 11, Stocks and Stock Valuation._
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