Companies E and P Each Reported the Same Earnings Per

question 33

Multiple Choice

Companies E and P each reported the same earnings per share (EPS) ,but Company E's stock trades at a higher price.Which of the following statements is CORRECT?

• A) Company E probably has fewer growth opportunities.
• B) Company E is probably judged by investors to be riskier.
• C) Company E must have a higher market-to-book ratio.
• D) Company E must pay a lower dividend.
• E) Company E trades at a higher P/E ratio.