A Drawback to the Price/earnings Ratio Method Is That

question 30

Multiple Choice

A drawback to the price/earnings ratio method is that

• A)the stock of a private company is publicly traded.
• B)the stated net income of a private company may not truly reflect its actual earning power.
• C)it is relatively easy to find a truly comparable publicly held company, even in the same industry.
• D)it distorts profits earned.

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Definitions:

1,3-Butadiene

A basic conjugated diene having the chemical structure C4H6, utilized as a monomer for synthesizing synthetic rubber.

Stepwise Mechanism

A reaction mechanism in chemistry that occurs through multiple discrete steps, each with its own transition state and intermediates.

Reaction

A sequence where substances engage and yield new entities with unique properties.

1,4-Addition

A reaction mechanism where an electrophile adds to the 1st and 4th positions of a conjugated diene, providing a product with substituents at those positions.