$.$ If a company's stock is trading at $$150$ for one share, and the company's annual earnings per share is $$2\mathrm{.}5.$ What is the company's Price$-$to$-$Earnings $($P$/$E$)$ ratio? How would you interpret the ratio for your investment decision?

A high P$/$E ratio can mean that a stock's price is high relative to earnings and possibly $$overvalued$.$ A low P$/$E ratio might indicate that the current stock price is low relative to earnings and $$undervalued$.$