Tuesday, December 13, 2011

How do they figure out how to chart a stock's price in relation to its earnings?

if i saw a chart with a line graph of a stock's earnings and price for the past year or so. how would i know if the stock is overpriced or underpriced. basically what i'm saying is: the y-axes for the two variables are on different scales, how can i make them relate in a meaningful way.

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