C2 - P E ratio's

retaker · #1 10-23-2002, 02:34 PM

Just a quick question. In the book I don't believe the Price Earnings ratio is ever explicitly defined. Is it always P_t/ E_t+1 instead of P_t/ E_t ?

Avi · #2 10-23-2002, 03:10 PM

Brealy and Myers is vague on this.

EPS is earnings per share. There is a footnote on page 76 that implies it should be future, but I think the practice is to use current. I actually don't know for certain.

retaker · #3 10-23-2002, 03:23 PM

I know I saw a question the other day where they wanted current price over end of year earnings.

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