Stocks
The P/E ratio, briefly
Price-to-earnings divides the share price by annual earnings per share. A stock at $40 earning $2 a share has a P/E of 20 — you're paying $20 for each $1 of yearly profit.
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Price-to-earnings divides the share price by annual earnings per share. A stock at $40 earning $2 a share has a P/E of 20 — you're paying $20 for each $1 of yearly profit.