Which of the Following Statements Is CORRECT

question 10

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 equal.
• 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/or 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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