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.

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Definitions:

Vertebral Column

The series of vertebrae extending from the skull to the small of the back, encasing the spinal cord and providing support to the body.

Thoracic Cage

The bony and cartilaginous structure forming the skeleton of the thorax, protecting vital organs and assisting in respiration.

Costal Cartilages

Bars of hyaline cartilage that extend from the ends of the ribs to the sternum, contributing to the elasticity and expansion capability of the rib cage.

Vertebral Foramina

The holes in the vertebrae through which the spinal cord passes, forming the vertebral or spinal canal.