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which analysis or ratio you feel is most useful. Do you think you will look at...

which analysis or ratio you feel is most useful.

Do you think you will look at a company’s earnings per share (EPS), price earnings ratio (PE Ratio), or dividends, before you invest in a company’s stock?

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Answer #1

The price-to-earnings, or P/E, ratio shows how much stock investors are paying for each rupee of earnings. It shows if the market is overvaluing or undervaluing the company. One can know the ideal P/E ratio by comparing the current P/E with the company's historical P/E, the average industry P/E and the market P/E

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