31 December 2009
If a company having PE Ratio is 10 and another company whose PE Ratio is 5 which one is good for the invester and how? please elaborate the impect of PE Ratio.
02 January 2010
A high PE ratio indicates that the stock is more expensive than the stock with lower PE. However, on the flip side, it also means that the market is giving a higher valuation to the company with higher PE due to higher growth potential of the company.
PE is not the only factor to be considered in stock selection.
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