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A relatively high Price/Earnings ratio indicates a high willingness of investors to pay for each dollar per share of the firm. However, if the investors
A relatively high Price/Earnings ratio indicates a high willingness of investors to pay for each dollar per share of the firm. However, if the investors are not rational, this means that behind the relatively high P/E ratio there is a formation of a bubble for the stock. Discuss several good reasons that can explain the relatively high P/E ratio of the stock.
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