Which of the following statements is FALSE?
A) We can estimate the value of a firm's shares by multiplying its current earnings per share by the average price-earnings ratio of comparable firms.
B) For valuation purposes, the trailing price-earnings ratio is generally preferred, since it is based on actual not expected earnings.
C) Forward earnings are the expected earnings over the coming 12 months.
D) Trailing earnings are the earnings over the previous 12 months.

Question

Quizplus · Accepted Answer

B) For valuation purposes, the forward price-earnings ratio is generally preferred, since it is based on the expected earnings.

Which of the Following Statements Is FALSE