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P/E Price to Earning Ratio

Posted on February 11, 2011 by Tom DeGrace

P/E Price to Earning Ratio is the current price of the shares divided by the EPS (earnings per share)

Understand How P/E Price to Earning Ratio Works

The value of a stock is often determined by what the P/E ratio is compared to its growth rate.  A stock that trading at a lower P/E than its annual growth % is usually considered a good value.

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