An analyst makes the following statement: Use of P/E and other multiples for analysis is not effective
Question:
An analyst makes the following statement: “Use of P/E and other multiples for analysis is not effective because the multiples are based on historical data and because not all companies have positive accounting earnings.” The analyst’s statement is most likely:
A. Inaccurate with respect to both historical data and earnings.
B. Accurate with respect to historical data and inaccurate with respect to earnings.
C. Inaccurate with respect to historical data and accurate with respect to earnings.
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Step by Step Answer:
A is correct The statement is inaccurate in both respects Although mu...View the full answer
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Related Book For 
Investments Principles Of Portfolio And Equity Analysis
ISBN: 9780470915806
1st Edition
Authors: Michael McMillan, Jerald E. Pinto, Wendy L. Pirie, Gerhard Van De Venter, Lawrence E. Kochard
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