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Assume that Verizon stock has a market price of $54.98 and a PE ratio of 16....

Assume that Verizon stock has a market price of $54.98 and a PE ratio of 16. Assume that Oracle stock has a market price of $47.94 and a PE ratio of 18.   Explain which is considered by most analyst to be the more expensive stock and why

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Answer #1

More expensive stock is considered that stock which is trading at a higher price to earnings ratio because higher price to earnings ratio will mean that the stocks which are relatively trading at higher market price in respect to their earnings so in this case it can be seen that Oracle is having a price to earning of 18 which is higher than that of Verizon,So I will say that Oracle is trading at an expensive valuation in comparison to Verizon.

ORACLE is trading to evaluation and it is MORE EXPENSIVE

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