Firm a Has a Share Price of $35 and 60

question 9

Multiple Choice

Firm A has a share price of $35 and 60% of the value of the shares is in the form of PVGO. Firm B also has a share price of $35 but only 20% of the value of Share B is in the form of PVGO. We know that ________.
I. Share A will give us a higher return than Share B
II. an investment in Share A is probably riskier than an investment in Share B
III. Share A has higher forecast earnings growth than Share B

• A)I only
• B)I and II only
• C)II and III only
• D)I, II and III

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Definitions:

Upstream

In a supply chain context, refers to processes or activities that occur at the beginning of the production process or closer to the raw materials stage.

Downstream

Refers to the refining of petroleum crude oil and the processing and purifying of raw natural gas, as well as the marketing and distribution of products derived from crude oil and natural gas.

Unrealised Profit

Profit that has been generated on paper through an increase in the value of an asset but has not yet been realized through a sale.

Investor's Share

The portion of an investment's returns or an enterprise's profits allocated to an investor, based on the ownership percentage.