TOPIC: Price-to-earnings ratio

1) Introduction that succinctly summarizes this topic and its key issues, controversies

2) Critically analyse the price-to-earnings ratio used for share valuation

3)Identify and evaluate difficulties and limitations in using the PE ratio to value share.

4) Examine how a higher stock price reinforces agency incentives associated with the alignment of interests between managers and shareholders, arguments drawing on Agency theory

5) Conclusion that sums up the mains issues of this.