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Investors are willing to purchase stocks having high P/E ratios because:
a. They expect these shares to sell for a lower price.
b. They expect these shares to offer higher dividend payments.
c. These shares are accompanies by guaranteed earnings.
d. They expect these shares to have greater growth opportunities.

Respuesta :

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Answer:

D. They expect these shares to have greater growth opportunities.

Explanation: P/E(price to earning) ratio is a ratio used in the stocks and other marketable securities to determine the price of the shares of a particular Company in relationship with the annual net income of the company per share.

A HIGHER PRICE TO EARNING RATIO INDICATES THAT THE COMPANY INVOLVED IS EFFICIENTLY UTILIZING ITS RESOURCES IN ORDER TO GENERATE PROFIT,IT ALSO SHOWS THAT THEIR IS HIGH DEMAND FOR THE COMPANY'S SHARES BECAUSE INVESTORS TRUST IN THE COMPANY'S ABILITY TO GROW AND MAKE PROFIT.

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