You observe the following for Stocks J and K:

Stock	Stock Price	Net Income (earnings)	Shares Outstanding
J	$22.00	$1,500	1,000
K	$19.00	$1,200	750

Stock J and K are in the same industry and you expect they will have similar growth and risk profiles going forward. Based solely on each stock's P/E ratio (Price / Earnings Per Share), which stock would you consider undervalued and why?

Group of answer choices

Stock J. It's P/E ratio is higher.

Stock J. It's P/E ratio is lower.

Neither. The P/E ratios are the same.

Stock K. It's P/E ratio is lower.

Stock K. It's P/E ratio is higher.