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

question 97

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:

Play Down Differences

The act of minimizing or understating the importance of disparities or variations among people or situations.

Accommodation

The process of adjusting one's behavior or thinking to align with others' expectations or to cope with new information.

Conflict Management Strategy

An approach for handling disputes and disagreements in an effective manner to find a resolution.

Opposition

Groups or individuals expressing resistance or dissent against prevailing ideas, policies, or leadership, often in a political context.