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What would be a normal p-e ratio

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Question 1: In the late 1990s P/E ratios were high by historical standarts .The P/E ratio for the S&P 500 stocks was as high as 33 in 1999.In the 1970s it was 8. What do you think would be a "normal" P/E ratio -that is, where multiples higher than normal could be called "High" and multiples less than normal could be called "low"? Hint:The P/E ratio is the inverse of the E/P ratio,sometimes called the earnings yield.Compare this yield with normal return for stocks of about 10 percent.

Reference no: EM132626252

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