Cyclically adjusted p/e ratio (Cape)

A classic price/earnings ratio is the relationship between the current share price and one year's earnings, usually the last year, or a forecast for the year ahead...

The price/earnings (p/e) ratio is a popular measure for assessing whether a share is cheap. It’s simple to calculate – you just divide the share price by earnings per share. A low number (eg, below ten) suggests that you aren’t paying much for each £1 of earnings, while a high number indicates a stock may be expensive (unless it’s growing rapidly).

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