Which ratio indicates the relationship between the market value per share and the earnings per share of a stock?

The Price Earnings Ratio (P/E Ratio) is a crucial metric that reflects the relationship between a company's current share price and its earnings per share (EPS). It is calculated by dividing the market value per share by the earnings per share. This ratio is significant because it provides investors with an understanding of how much they are willing to pay today for a dollar of the company's earnings.

A high P/E ratio may suggest that the market has high expectations for a company’s future growth, indicating that investors anticipate significant profitability, whereas a low P/E ratio may imply that the market has lower expectations or that the stock is undervalued. The P/E ratio is commonly used by investors to gauge the relative value of a stock compared to its earnings and can be a useful tool for stock valuation and comparing similar companies within the same industry.

The other options, such as dividend yield, comprehensive income, and market value of a share, do not directly measure this relationship in the same way that the Price Earnings Ratio does. Dividend yield focuses on the income generated from dividends relative to the stock price, while comprehensive income relates to the total change in equity from transactions and other events, not just earnings. The market value of a share simply refers to its current trading price and does