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P/E of unlisted company

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › P/E of unlisted company

  • This topic has 1 reply, 2 voices, and was last updated 5 years ago by AvatarJohn Moffat.
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  • January 19, 2021 at 2:07 pm #607174
    AvatarNoah098
    Member
    • Topics: 935
    • Replies: 352
    • ☆☆☆☆☆

    sir why is there a general tendency to adjust an unlisted company’s P/E downwards? As in if the P/E ratio is of a listed competitor.

    Is it because the unlisted company’s shares are not liquid enough, so they should be adjusted downwards(as a default strategy, if not much mentioned).

    January 19, 2021 at 4:15 pm #607188
    AvatarJohn Moffat
    Keymaster
    • Topics: 57
    • Replies: 54838
    • ☆☆☆☆☆

    Yes, that is the reason 🙂

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