Which of the Following Statements Is CORRECT

question 24

Multiple Choice

Which of the following statements is CORRECT?

• A)If Firms X and Y have the same P/E ratios, then their market-to-book ratios must also be the same.
• B)If Firms X and Y have the same net income, number of shares outstanding, and price per share, then their P/E ratios must also be the same.
• C)If Firms X and Y have the same earnings per share and market-to-book ratio, they must have the same price earnings ratio.
• D)If Firm X's P/E ratio exceeds that of Firm Y, then Y is likely to be less risky and also to be expected to grow at a faster rate.
• E)If Firms X and Y have the same net income, number of shares outstanding, and price per share, then their market-to-book ratios must also be the same.

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Definitions:

Mum Effect

Occurs when people are reluctant to communicate bad news.

Retribution

The infliction of punishment or penalty in response to wrongdoing, often seen as a form of justice.

Personal Mistakes

Errors or poor decisions made by an individual, often leading to learning opportunities.

Channel Richness

The degree to which a communication channel conveys information effectively, including verbal, non-verbal, and contextual cues.