Conceptually, firms with P/E ratios less than their projected growth rates may be considered undervalued; while those with P/E ratios greater than their projected growth rates may be viewed as overvalued.

Question

Quizplus · Accepted Answer

This statement is true as it suggests that firms with lower P/E ratios relative to their projected growth rates may be undervalued, while firms with higher P/E ratios relative to their projected growth rates may be overvalued.

Conceptually, Firms with P/E Ratios Less Than Their Projected Growth