Shown below is a correlation table showing correlation coefficients between stock price, earnings per share (EPS) and
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Question:
Shown below is a correlation table showing correlation coefficients between stock price, earnings per share (EPS) and price/earnings (P/E) ratio for a sample of 19 publicly traded companies. Which of the following statements is false?
Stock Price | EPS | |
---|---|---|
EPS | 0.875 | |
PE | 0.323 | -0.111 |
A. EPS is the best predictor of stock price.
B. The strongest correlation is between EPS and stock price.
C. There is a weak negative association between PE and EPS.
D. PE is the best predictor of stock price.
E. The weakest correlation is between PE and EPS
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