Laura Is Considering Two Investments: Stock a and B

question 63

Multiple Choice

Laura is considering two investments: Stock A and B. Both stocks have a P/E ratio of 19. Stock A has an expected growth rate of 5 percent and stock B has an expected growth rate of 13 percent. Which is the better stock and why?

• A) Stock B is better because it is considered to be cheaper than Stock A.
• B) Stock A is better because it is expected to grow at a slower rate and therefore will be less risky than Stock B.
• C) Since the P/E ratios are the same, Laura would be indifferent between the two stocks.
• D) None of these statements is correct.

Understand the legal constraints on employment practices under the Fair Labor Standards Act (FLSA) and child labor regulations.

Recognize the requirements for equal pay and the prohibitions against gender-based pay discrimination under the Equal Pay Act.

Understand the administration of social security benefits and federal unemployment compensation laws.

Understand the diverse theoretical perspectives on religion, including functionalism, conflict theory, symbolic interactionism, and feminism.

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Definitions:

Maturing Obligations

Short-term debts or obligations that are nearing their due date and need to be repaid or refinanced.

Non-Current Liabilities

Non-Current Liabilities are obligations of a company that are due beyond one year, such as long-term loans, bond payables, and lease obligations.

Mortgages

Loans secured by real estate property, allowing borrowers to purchase property over time.

Solvency Ratios

Financial ratios that assess a company's ability to meet its long-term obligations, providing insight into its financial stability.