It is normal for the average P/E ratio to be between 20 and 30. For funds with a fairly high P/E ratio (e.g. more than 100 times), the dividend yield is empty. Especially when the P/E ratio of stocks exceeds 65,438+000 times, it means that investors need more than 65,438+000 years to make profits, the stock valuation is inflated, and there is no dividend distribution.

If the P/E ratio of a company's stock is too high, then the value of the stock will bubble and its use value will be inflated. When an enterprise grows rapidly and has confidence in the future revenue growth, when using the investment value of stocks with different P/E ratios, these stocks must belong to the same field, because the company's net assets per share are very close at this time, and the comparison will be effective.

Because the yield of risk-free assets (usually short-term or long-term treasury bonds) is the economic cost of investors and the lowest yield expected by investors, the increase of risk premium, the increase of investment yield required by investors and the increase of bank discount rate lead to the decrease of P/E ratio of stocks. Therefore, the relationship between stock price-earnings ratio and risk-free asset yield is opposite.