Which of the Following Statements Is CORRECTσ

question 55

Multiple Choice

Which of the following statements is CORRECTσ

• A) the more depreciation a firm has in a given year, the higher its eps, other things held constant.
• B) typically, a firm's dps should exceed its eps.
• C) typically, a firm's ebit should exceed its ebitda.
• D) if a firm is more profitable than average (e.g., google), we would normally expect to see its stock price exceed its book value per share.
• E) if a firm is more profitable than most other firms, we would normally expect to see its book value per share exceed its stock price, especially after several years of high inflation.

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Definitions:

Social Comparison Theory

The concept that people gauge their own value and societal status by comparing themselves to others.

Present Performance

The current level of achievement or effectiveness in a particular activity or field, often assessed to identify areas for improvement.

Our Behavior

Refers to the range of actions and mannerisms exhibited by individuals, groups, or systems in response to external or internal stimuli.

Group Norm

A set of informal guidelines or rules that members of a group follow, shaping behavior and expectations within that group.