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•Studies Relationship Between Stock

Price & Company Earning


•Most Popular Tool For Stock Analysis
•Also Referred as price multiple or
earning multiple
PE=Market price per share
Earning Per Share

Eg: Market Price of a share is Rs 40


EPS is Rs 8 Therefore the PE Ratio
is Rs 5

Actually PE Ratio Means: It gives


you an idea of what the market is
willing to pay for the companies
earning
THUMB RULE FOR UNDERSTANDING
PE

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