Which of the Following Statements Is CORRECT

question 13

Multiple Choice

Which of the following statements is CORRECT?

• A) If a firm has the highest price/earnings ratio of any firm in its industry, then, other things held constant, this suggests that the board of directors should fire the president.
• B) If a firm has the highest market/book ratio of any firm in its industry, then, other things held constant, this suggests that the board of directors should fire the president.
• C) Other things held constant, the higher a firm's expected future growth rate, the lower its P/E ratio is likely to be.
• D) The higher the market/book ratio, then, other things held constant, the higher one would expect to find the Market Value Added (MVA).
• E) If a firm has a history of high Economic Value Added (EVA) numbers each year, and if investors expect this situation to continue, then its market/book ratio and MVA are both likely to be below average.

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Definitions:

Ground Substance

The amorphous gel-like substance in the extracellular matrix that provides support and binds cells together.

Leukocytes

White blood cells that are part of the immune system, responsible for defending the body against infectious disease and foreign materials.

Erythrocytes

Red blood cells that transport oxygen from the lungs to tissues throughout the body and return carbon dioxide for exhalation.

Formed Elements

Cells and cell fragments in blood, including red blood cells, white blood cells, and platelets.