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You are trying to use P/E ratio to evaluate a company. You identified 10 comparable firms within the same industry. However, one peer firm has
You are trying to use P/E ratio to evaluate a company. You identified 10 comparable firms within the same industry. However, one peer firm has extremely large P/E ratio of 1,000, another has negative P/E ratio. Which of the following statement is inaccurate? O You can discard the firm with 1,000 P/E You cannot discard the firm with negative P/E if it is caused by one-time expenses You can discard the firm with negative P/E O You can use the median P/E ratio of the 10 comparable firms for valuation
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