Companies a and B Are Both in the Same Industry

question 114

Multiple Choice

Companies A and B are both in the same industry and generally compete against each other in the marketplace. Stock A has a P/E ratio of 15 while Stock B's P/E is 21. Which of the following is not true about the relative positioning of Stock A and Stock B?

• A) Stock B has lower perceived risk.
• B) Investors are willing to pay a higher price for shares in Company B.
• C) Company A's business performance is probably not as strong as Company B's performance.
• D) All of the statements are correct.

Understand the concept of Loan to Value Ratio and its calculation.

Calculate the impact of increased payment amounts on the amortization period of a loan.

Understand and calculate Total Debt Service Ratios and Gross Debt Service Ratios.

Determine the amount of principal paid off with structured payments over a specified period.

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Definitions:

Redeployment

The process of moving employees from one area of the business to another to match the company's workforce with its operational needs.

External Supply

Refers to the availability of resources or inputs, such as labor or materials, from outside an organization that are essential for its operations.

Retraining Employees

Involves updating the skills of employees to keep them efficient in their current jobs or prepare them for new roles within the organization.

Working Conditions

The environment, terms, and circumstances under which employees work.