Business Valuation using P/E: BPP pg 432 q15

3 is incorrect because although it is true that the PE ratio is the reciprocal of the earnings yield, the question asks which of the statements are problems in using it to value a company. The fact that it is the reciprocal is not a problem for anything :-) 4 is incorrect because it takes stock market information but not corporate information (corporate information is information about things such as the company's future plans)