Question: Which statement ( s ) below is correct? i ) When the PE ratio increases and the earnings per share remain the same, the value
Which statements below is correct?
i When the PE ratio increases and the earnings per share remain the same, the value of the shares increases.
ii The Price Earnings PE ratio measures the current share price to the earnings per share.
iii When markets are declining, PE ratios usually decrease because investors are looking for higher earnings for every Rand of share price, they are willing to pay.
iv There is a strong relationship between the earnings of a company and the price that buyers are willing to pay for the shares in the company.
v A low PE ratio is an indication that the share price is too high, and shareholders will not pay the market price.
Select the correct option.
ii; iii; iv
i iv; v
iii; iv; v
None of the options is correct.
All of the options are correct.
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