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What is a stocks price-to-earnings ratio?

April 26, 2017price-to-earnings ratio stock

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What is a stocks price-to-earnings ratio?

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A stock’s P/E ratio is a tool for comparing the prices of different common stocks by assessing how much the market is willing to pay for a share of each corporation’s earnings. It is calculated by dividing the current market price of a stock by the earnings per share.