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what is the p/e ratio?
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the pe ratio stands for the price-earnings ratio. the price-earnings ratio is a straightforward formula: share price divided by earnings per share. earnings per share is calculated by dividing the pre-tax profit for the company by the number of shares in issue. the pe ratio is seen by some as a measure of future growth of a company. as a general rule, the higher the pe, the faster the market believes a company will grow. this question is answered on our dividendmax website: http://www.dividendmax.co.uk/help/investor-glossary/what-is-the-pe-ratio cheers
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