Earnings Growth Potential Implicit in Price-Earnings Ratio
Available Online July 2017.
- https://doi.org/10.2991/essaeme-17.2017.26How to use a DOI?
- P/E ratio, earnings growth rates, correlation, Beta
- P/E ratio has enjoyed high popularity as a simple tool to determine whether a stock is undervalued, but its determinants remain unclear and controversial. Earnings growth rate is regarded as a main factor. Looking backward, some theories perceives growth rates as randomly distributed across years thus offer no clue into the behavior pattern of P/E ratios, while other studies claim contradictory conclusion. This article reexamines the problem from perspectives of theories and empirical studies based on data from 2007 to 2017 in China's domestic stock markets. Behavior patterns of P/E ratios and earnings growth rates are interpreted and the risk factor is also incorporated in the analysis.
- Open Access
- This is an open access article distributed under the CC BY-NC license.
Cite this article
TY - CONF AU - Jingying Zhou PY - 2017/07 DA - 2017/07 TI - Earnings Growth Potential Implicit in Price-Earnings Ratio BT - Proceedings of the 2017 3rd International Conference on Economics, Social Science, Arts, Education and Management Engineering (ESSAEME 2017) PB - Atlantis Press SN - 2352-5398 UR - https://doi.org/10.2991/essaeme-17.2017.26 DO - https://doi.org/10.2991/essaeme-17.2017.26 ID - Zhou2017/07 ER -