Timeline for Different ways of looking at P/E Ratio vs EPS
Current License: CC BY-SA 3.0
3 events
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| Jan 7, 2012 at 2:31 | comment | added | mgkrebbs | @Sean Thoman - what you suggest would be true only if the "demand" is being measured in shares, not in the worth of the piece of the company represented by those shares. This would happen only if people are buying a share as a souvenir or keepsake to frame, and not as a financial investment. As an investment, the demand is for the earning potential of a percentage of the company. The investor is looking to invest his $5000 for a piece of the company that will earn (say) $500 a year, and it doesn't matter if that is represented by 100 shares or 50 shares on the certificate. | |
| Jan 6, 2012 at 23:18 | comment | added | Sean Thoman | Thats a good point, although couldn't you argue that the company with fewer shares, all other things being equal (especially demand), is coveted more because its shares are in shorter supply? It has nothing to do with the quality of the company, but something to do with supply & demand effecting the value of the stock. | |
| Jan 6, 2012 at 21:27 | history | answered | Eric Petroelje | CC BY-SA 3.0 |