Answer: The correct answer is "d. All of the above are true."
Explanation: All of these statements are true.
a. It is calculated by dividing the stock price by EPS
b. It can show whether a stock is under or overvalued
c. Can be used to compare similar companies but not companies from different industries
The price-benefit ratio, or P/E is a financial ratio that compares the price of a share with the profit per share of a company.
That is, the PER ratio tells us how much investors are willing to pay for each euro of profit. It is also known as P / E.
The PER is one of the most used financial ratios in the fundamental analysis. It tells us if a company's stock is overvalued or undervalued, because it tells us if the price of a stock has gone up or down a lot with respect to the company's profits.