A Company Whose Stock Is Selling at a P/E Ratio

question 24

Multiple Choice

A company whose stock is selling at a P/E ratio greater than the P/E ratio of a market index most likely has _________.

• A)an anticipated earnings growth rate which is less than that of the average firm
• B)a dividend yield which is less than that of the average firm
• C)less predictable earnings growth than that of the average firm
• D)greater cyclicality of earnings growth than that of the average firm
• E)none of the above.

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