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Which of the following statements about the Price/Earnings ratio is not correct? 1.If the market price of the stock increases and there is no change

Which of the following statements about the Price/Earnings ratio is not correct?

1.If the market price of the stock increases and there is no change in EPS, the Price/Earnings ratio will increase.

2. A high Price/Earnings ratio may mean that investors have pushed the price of the stock up in anticipation of higher future net income.

3. The Price/Earnings ratio indicates how much investors are willing to pay for a share of a company's stock as a multiple of current earnings.

4. If EPS decreases and there is no change in the market price of the stock, the Price/Earnings ratio will decrease.

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