Which Factor Is Least Likely to Explain Why One Company

question 15

Multiple Choice

Which factor is least likely to explain why one company has a higher P/E ratio than another?

• A)The company has a higher growth rate of earnings.
• B)The company has a higher required rate of return.
• C)The company has a higher current ratio.
• D)The company has a higher return on equity.

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Definitions:

Bonds Maturity

The date at which a bond's principal amount is due to be paid back to the bondholder, terminating the bond's existence.

Mortgage Note

A legal document that obligates a borrower to repay a loan used to purchase a property, outlining the terms of the loan, interest rate, repayment schedule, and enforcement rights.

Installment Payments

Payments made regularly over time to settle a debt or purchase, dividing the total cost into smaller amounts.

Principal Balance

The outstanding amount of a loan or mortgage that remains to be paid, excluding interest.