Which of the following statements regarding the price/earnings ratio is incorrect?
A) The price/earnings ratio represents the market price of one share of common stock.
B) A price/earnings ratio of 9.2 implies that the company's stock is selling at 9.2 times one year's earnings per share.
C) A higher price/earnings ratio signifies a higher return on investment.
D) The price/earnings ratio is most useful when comparing one company to another.
Correct Answer:
Verified
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