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Sagot :
When earnings are expected to be high relative to current earnings, then a. the P/E ratio of its stock will be high. A P/E ratio of 8 is relatively low.
What happens when future earnings are expected to be high?
If earnings are expected to be high as in the case of the Galt Corporation, then the price of the stock will rise.
This will then lead to a high P/E ratio because the price will rise but the earnings will remain the same.
Find out more on the P/E ratio at https://brainly.com/question/14644755.
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