Which of the Following Statements Is Correct

question 83

Multiple Choice

Which of the following statements is correct?

• A)If a firm has the highest price/earnings ratio of any firm in its industry, then, other things held constant, this suggests that the board of directors should fire the president.
• B)If a firm has the highest market/book ratio of any firm in its industry, then, other things held constant, this suggests that the board of directors should fire the president.
• C)Other things held constant, the higher a firm's expected future growth rate, the lower its P/E ratio is likely to be.
• D)The higher the market/book ratio, then, other things held constant, the higher one would expect to find the market value added (MVA).

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Definitions:

Mutual Interest

A shared concern or advantage that is beneficial to all parties involved in a particular situation or agreement.

Organic Organizations

A flexible and adaptive organizational structure that allows for quick decision-making processes and decentralized authority.

Bureaucratic Features

Characteristics of a bureaucratic organization include a hierarchical structure, formal rules and regulations, specialization, and an impersonal relationship between its members.

Worker Empowerment

The practice of giving employees the authority, resources, and freedom to make decisions and contribute to the company's success in meaningful ways.