A price/earnings ratio is viewed as a good measure of a company's dividend paying ability.

Question

Quizplus · Accepted Answer

A price/earnings ratio (P/E ratio) is not a measure of a company's dividend paying ability. It is a measure of the market's valuation of a company's earnings. A higher P/E ratio may indicate that investors have higher expectations for future earnings growth, but it does not necessarily translate to a higher dividend payout.

A Price/earnings Ratio Is Viewed as a Good Measure of a Company's