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P-E Ratio

P-E Ratio Definition

P/E Ratio is calculated by dividing the market price of common stock by its annual earnings per share. Price-to-Earnings is a key ratio used to determine how the market is pricing a company’s common stock. A stock with a low P/E Ratio is often seen as a better value than one with a higher P/E.

RELATED TERMS
EPS
PEG ratio
RELATED CATEGORIES
Earnings




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