If a Company Has a High Price-To-Book Ratio (PB) and Low

question 22

Multiple Choice

If a company has a high price-to-book ratio (PB) and low price-to-earnings (PE) ratio, this suggests that:

• A)earnings are expected to grow slowly or decline relative to current level, with low expected return on common stockholders' equity (ROCE).
• B)earnings are expected to grow quickly relative to current level, but with low expected ROCE.
• C)earnings are expected to grow slowly or decline relative to current level, but with high expected ROCE.
• D)earnings are expected to grow quickly relative to current level, with high expected ROCE.