Answer: greater than its forward P/E ratio.

When investors expect earnings to grow, the forward P/E ratio (based on expected future earnings) will be lower than the historical P/E ratio (based on current or past earnings). This is because the denominator in the forward P/E ratio (expected future earnings) is larger than the denominator in the historical P/E ratio (current earnings), making the forward P/E ratio smaller. Therefore, the historical P/E ratio will be greater than the forward P/E ratio when earnings growth is expected.

Author: LeetQuiz Editorial Team