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:

Autism Spectrum Disorder

A developmental disorder characterized by difficulties in social interaction, communication, and by restricted and repetitive behavior, interests, or activities.

Deficient Communication

Ineffective or insufficient exchange of information between individuals or groups, often leading to misunderstandings.

Repetitive Behaviors

Actions that are performed again and again, often a symptom of neurological disorders.

Inner Speech

Mental dialogue or the silent conversation one has with oneself, which plays a role in thinking and decision-making.