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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Earnings Yield method
Hi Sir,
under what chapter can I check this? I had been answering the Phobis Co under BPP and encountered this.
Is this different from PE ratio method?
It is the same logic as PE basis, but whereas the PE ratio is market value / earnings, the earnings yield is earnings / market value. (So the earnings yield is equal to 1 / PE ratio)
I really cannot remember whether I mention earnings yield in the lectures or not, because it is revision from Paper FA (was F3) and is less commonly used than the PE ratio.
Thanks Sir, will look for it
You are welcome 🙂