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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Definitions:

Check Register

A record book or software where all checks written, deposits, and bank transactions are recorded.

Cash Balance

The total amount of money in cash form available in an account at any given time.

Deposits

Money placed into a bank account or with a financial institution for safekeeping.

Bank Statement

A formal accounting by a bank of the adding and subtracting activities that have occurred in one bank account over a stated period of time (usually a month).