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What is price-earning ratio? When and why do we use P/E ratio?

What is price-earning ratio? When and why do we use P/E ratio?

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Price Earnigns Ratio is the Ratio which tells about how much an investor is willing to pay for a particular earnings of a company which belongs to an industry, It is calculated as follows : -

  • PE Ratio is used to compare the company's valuation in the same industry for better judgement of investmenet prospect.
  • PE ratio, sometimes used to calculate the Price of stock of any company,

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