The S&P 500 P/E multiple of 25.54 at the end of 2016 was higher than its historical
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The S&P 500 P/E multiple of 25.54 at the end of 2016 was higher than its historical average of approximately 15. Some financial commentators argued that this meant that the firms in the S&P 500 were, on average, overvalued at the end of 2016. Based on your analysis in Problem 18.29 and the concepts covered in this book, do you think that these commentators are right or wrong? Why or why not?
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Fundamentals of Corporate Finance
ISBN: 978-1119371403
4th edition
Authors: Robert Parrino, David S. Kidwell, Thomas Bates
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