The correct answer is D. P/E ratio.
The P/E ratio is a valuation ratio that compares a company’s stock price to its earnings per share. A high P/E ratio indicates that investors are willing to pay a premium for a company’s stock, which may be due to expectations of strong future earnings growth. However, a high P/E ratio can also be a sign that a stock is overvalued.
Earnings per share (EPS) is a measure of a company’s profitability. It is calculated by dividing a company’s net income by the number of shares outstanding. A high EPS indicates that a company is profitable and is generating a lot of earnings per share. However, EPS can be misleading if a company has a large number of shares outstanding.
Dividend yield is a measure of a company’s dividend payout ratio. It is calculated by dividing a company’s annual dividend per share by its stock price. A high dividend yield indicates that a company is paying out a large portion of its earnings as dividends. However, a high dividend yield can also be a sign that a company is struggling to grow its earnings.
Book value is a measure of a company’s assets minus its liabilities. It is often used as a measure of a company’s intrinsic value. However, book value can be misleading if a company has a lot of intangible assets, such as patents or trademarks.
In conclusion, the correct answer is D. P/E ratio.