Which of the Following Statements Is False

question 46

Multiple Choice

Which of the following statements is false?

• A) The most common valuation multiple is the price-earnings (P/E) ratio.
• B) You should be willing to pay proportionally more for a stock with lower current earnings.
• C) A firm's P/E ratio is equal to the share price divided by its earnings per share.
• D) The intuition behind the use of the P/E ratio is that when you buy a stock, you are in sense buying the rights to the firm's future earnings and differences in the scale of firms' earnings are likely to persist.

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Definitions:

Socialization Influences

The effects of interaction with family, peers, institutions, and media on the process of learning social norms, behaviors, and cultural practices.

Peers

Individuals who are of similar age, social status, or share similar interests, often influencing social and developmental outcomes.

Aggressive

Pertaining to behavior that is hostile, harmful, or assertive with the intention of dominating or causing injury to others.

Career

The progression and actions of an individual's work life or professional achievements over time.