Determinants of Price-Earning Ratio

Relative P/E-ratio valuation plays an important role among investment research analysts and advisors. The P/E ratio relates to the price paid current earnings. Due its simple computation for various stocks also, making comparisons between stocks, it is widely accepted. question being addressed find out determinants that differentiates of one company from other in a specified time period over time. A model can be viewed as technically model, using company's earnings value driver, typically dependent on having access stock market data comparable companies. This analysis concerned with importance differences, pertaining relevant variables (measures profitability capital growth), also acts proxy risk growth firm much likely reflect moods perceptions.