One of the most common terms used in the equity markets P/E stands for Price/Earning multiple, Here the price is the current market price of the share and the Earning is the EPS of the company. A P/E multiple of the stock shows the times that the market is willing to pay for the present earnings of the company.
So say a stock has an EPS of Rs.10 and the market price of that share is 100, this means that the P/E Multiple is 10 or investors are willing to pay 10 times the earnings of the company. Using this yardstick one can say that generally the shares of high growth companies have higher P/E multiples.
