Earnings Multiplier

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Earnings Multiplier

The price of a security per share at a given time divided by its annual earnings per share, adjusted for current interest rates. Often the earnings used are trailing 12-month earnings, but some analysts use other forms. The earnings multiplier is a way to help determine a security's stock valuation, that is, the fair value of a stock in a perfect market. It is also a measure of expected, but not realized, growth. It is a variation on the price-earnings ratio.
References in periodicals archive ?
Final-demand earnings multipliers are based on the change in final demand produced by an activity such as tourism spending in the region and equals the output multiplier for an industry multiplied by the household-row entry in the direct requirements table.
Earnings multipliers for the tourism-related industries in Table 3 can be compared with those found in our review of studies employing tourism multiplier methodologies for U.
TABLE 5 TOURISM OUTPUT AND EARNINGS MULTIPLIERS IN SELECTED U.
Direct-effect multipliers cannot be compared to the earnings multipliers shown in Table 5 for comparable U.
Comparing the implicit final-demand output and earnings multipliers in Table 7 with those available for other U.
The direct-effect earnings multiplier indicates the ratio of total earnings generated by the change in final demand to the earnings directly generated.
2 million) by the direct-effect earnings multiplier in row D, column 4 (1.
The sun will come out tomorrow": Optimistic outlooks for the economy in 2009 should cause earnings multipliers on equities to rise ahead of the anticipated positive developments.