Price to Earnings (P/E) Ratio is a measure of how much investors are willing to pay for a company’s earnings. It compares the current price of a stock to the company’s earnings per share (EPS). A higher P/E ratio means that investors are paying more for each dollar of earnings, which could indicate that they expect higher growth in the future. A lower P/E ratio means that investors are paying less for each dollar of earnings, which could indicate that they expect lower growth or that the company is undervalued. The formula for P/E ratio is:
P/E Ratio = Average Price per Share / Earnings per Share
Where:
- Average Price per Share is R0136,
pr_average
- Earnings per Share is TM010,
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