If the components of price/earnings ratio are inverted, the resulting percent is referred to as which of the following?
A) Multiple.
B) Dividend yield ratio.
C) Book value per share.
D) Capitalization rate.

Question

Quizplus · Accepted Answer

The inversion of the price/earnings (P/E) ratio results in the earnings/price ratio, which is referred to as the earnings yield. The earnings yield is often considered synonymous with the capitalization rate in this context, as it represents the rate of return on an investment.

If the Components of Price/earnings Ratio Are Inverted, the Resulting