{"title":"Is China’s P/E Ratio Too Low? Examining the Role of Earnings Volatility","authors":"T. Wirjanto, A. Huang","doi":"10.2139/ssrn.1632667","DOIUrl":null,"url":null,"abstract":"We find that China’s P/E ratio is comparable to that of the U.S. SP and (ii) historical earnings volatility is considerably higher in China than in the U.S. Higher earnings volatility in China offsets higher growth prospect in setting the P/E ratio, making its P/E ratio much closer to what is observed empirically than otherwise implied by its growth rate.","PeriodicalId":213755,"journal":{"name":"International Environment of Global Business eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0000,"publicationDate":"2010-07-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"16","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Environment of Global Business eJournal","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.2139/ssrn.1632667","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 16
Abstract
We find that China’s P/E ratio is comparable to that of the U.S. SP and (ii) historical earnings volatility is considerably higher in China than in the U.S. Higher earnings volatility in China offsets higher growth prospect in setting the P/E ratio, making its P/E ratio much closer to what is observed empirically than otherwise implied by its growth rate.
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