In General, If a Firm Has Positive Present Value of Growth

question 102

Multiple Choice

In general, if a firm has positive present value of growth opportunities, then its price-earnings ratio:

• A)Is greater than its required rate of return
• B)Is less than its required rate of return
• C)Equals its required rate of return
• D)Will be lower than the industry average

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Definitions:

Abstract Thinking

The ability to think about objects, principles, and ideas that are not physically present.

Glaucoma

A group of eye conditions that can cause damage to the optic nerve, potentially leading to loss of vision if not treated.

Eye Disease

Any condition that affects the eye's structure, function, or health.

Depth Perception

The ability to perceive the world in three dimensions and judge the distance of objects accurately.