Which of the Following Statements Is CORRECT

question 42

Multiple Choice

Which of the following statements is CORRECT?

• A) 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.
• B) If Firms X and Y have the same P/E ratios, then their market-to-book ratios must also be the same.
• C) 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.
• D) If Firms X and Y have the same earnings per share and market-to-book ratio, they must have the same price earnings ratio.
• E) 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.

---

Definitions:

Management

The process of planning, organizing, leading, and controlling resources within an organization to achieve its goals efficiently and effectively.

Sustainability

The ability to maintain or improve the quality and longevity of a resource, practice, or system without depleting the contributing elements it requires.

Nonprofits

Entities designed to serve the public or community benefits without seeking commercial or monetary profits for their owners or stakeholders.

Services

Activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything.