Earnings multipliers for series of stocks (such as the S&P 400) have been found to be
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A. B. C. D.A
The standard deviation of annual changes of the earnings multiplier for the S&P 400 is 28.2, while that for the annual earnings for the S&P 400 is 18.3. To value stock series, one needs to estimate both the earnings multiplier and the earnings. Although some analysts have tended to ignore the earnings multiplier on the assumption that it is stable over time, its high measured variability makes it hard to ignore.