Which of the Following Statements Is CORRECT

question 96

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:

Phosphatidyl Choline

A major component of biological membranes, also known as lecithin, involved in membrane-mediated cell signaling and metabolism.

Lecithin

A fatty substance found in plant and animal tissues, used as an emulsifier in food production and as a supplement.

Sodium Stearate

A sodium salt of stearic acid, often used as a surfactant in soaps and as a thickening agent.

Calcium Ions

Positively charged calcium atoms (\(Ca^{2+}\)) that play crucial roles in biological processes, including muscle contraction, neurotransmitter release, and bone formation.