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What does the Price-Earnings Ratio (P/E Ratio) mean?

mean price-earnings ratio
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What does the Price-Earnings Ratio (P/E Ratio) mean?

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It is the market value per share divided by the earnings per share. For example, if a company is currently trading at $43 a share and earnings over the last 12 months were $1.95 per share, the P/E ratio for the stock would be 22.05 ($43 divided by $1.95 equals 22.05).

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