Basu (1977, 1983) Found That Firms with Low P/E Ratios

question 67

Multiple Choice

Basu (1977, 1983) found that firms with low P/E ratios

• A) earned higher average returns than firms with high P/E ratios.
• B) earned the same average returns as firms with high P/E ratios.
• C) earned lower average returns than firms with high P/E ratios.
• D) had higher dividend yields than firms with high P/E ratios.

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