How Would You Explain P/E Ratio Differences Among Companies? by Differences

question 7

Multiple Choice

How would you explain P/E ratio differences among companies? By differences in investor:

• A) expectations about the future growth of the market.
• B) estimates of the recent growth of earnings.
• C) expectations about the future growth of earnings.
• D) estimates about the recent growth of dividends.

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Definitions:

Performance

The act of carrying out or accomplishing an action, task, or function.

Equitable Principles

Principles based on fairness, morality, and justice rather than strict rules of law.

Reliance Damages

Compensation awarded for losses suffered as a result of relying on a promise or contract that was not fulfilled.

Liquidated Damages

Pre-agreed upon sums specified in a contract, payable as compensation for breach or failure to meet specific terms.