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SSC Audit Tax Finance P-II QUESTION #6205
Question 1
What does a high 'Price-Earnings (PE) Ratio' typically suggest?
  • The firm is currently losing money.
  • Investors expect significant future growth.✔️
  • The stock is undervalued.
  • The firm has too much debt.
Correct Answer Explanation
A high PE ratio often indicates that the market expects high future earnings growth [cite: 43].