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When investing in stocks, investors often base their decision on the P/E ratio, which is the ratio of price per share to earnings per share.
When investing in stocks, investors often base their decision on the P/E ratio, which is the ratio of price per share to earnings per share.
Suppose that there are two stocks of similar companies in the same industry, and that one of them has a P/E ratio of 15 and the other, a ratio of 20. Which of these two stocks would you invest in.
Note that there is no single correct answer to this question. But whatever stand you take, you need to be able to provide some good reasons for it.
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