Question
The S&P 500 Index is one of the most commonly used benchmark indices for the US equity markets. Consisting of 500 companies, it is a
The S&P 500 Index is one of the most commonly used benchmark indices for the US equity markets. Consisting of 500 companies, it is a market value weighted index. This means that each company's performance is reflected in the index, weighted by the ratio of the company's value to the total value of all the companies.
Based on your understanding of P/E ratios, in which of the following situations would be the average trailing P/E ratio (current price divided by earnings per share over the previous 12 months) of the S&P 500 Index be higher?
- Forecast earnings for S&P 500 companies are expected to RISE or FALL IN THE FUTURE?
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Financial Management Theory And Practice
Authors: Eugene Brigham, Michael Ehrhardt, Jerome Gessaroli, Richard Nason
3rd Canadian Edition
017658305X, 978-0176583057
