A Company Whose Stock Is Selling at a P/E Ratio

question 103

Multiple Choice

A company whose stock is selling at a P/E ratio greater than the P/E ratio of a market index most likely has

• A)an anticipated earnings growth rate which is less than that of the average firm.
• B)a dividend yield which is less than that of the average firm.
• C)less predictable earnings growth than that of the average firm.
• D)greater cyclicality of earnings growth than that of the average firm.

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Definitions:

Credibility

The quality of being trusted and believed in, often achieved by being consistently honest and reliable.

Designation

Designation refers to a title or label assigned to someone or something to classify or identify them in a specific context.

Emotional Tone

The underlying mood or atmosphere conveyed by an individual's manner of communication, impacting how messages are perceived.

Final Remarks

The concluding statements in a speech, presentation, or written document that summarize the key points or provide a closing thought.