price to earnings ratio

Is the Australian Stock Market Expensive?

To determine whether a stock is cheap or expensive, investors generally use the price to earnings (P/E) ratio. Historical information can be used to compare how expensive a company is in comparison to how the share price has traded over time. Price per earnings can also be compared to other stocks in same industry. That way we can also determine whether individual stocks are expensive relative to their peers. What is the P/E ratio? The price per earnings formula is …

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