Companies a and C Each Reported the Same Earnings Per

question 30

Multiple Choice

Companies A and C each reported the same earnings per share (EPS) , but Company A's stock trades at a higher price. Which of the following statements is CORRECT?

• A) company a trades at a higher p/e ratio.
• B) company a probably has fewer growth opportunities.
• C) company a is probably judged by investors to be riskier.
• D) company a must have a higher market-to-book ratio.
• E) company a must pay a lower dividend.

Understand the relationship between credit sales, bad debt expense, and the adjustment of allowance for doubtful accounts.

Understand how to prepare journal entries for transactions involving sales, collections, and discounts.

Analyze the effect of transactions on financial statement components.

Define cash equivalents and identify their placement in financial statements.

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Definitions:

Emotive Style

A communication or behavioral style that is characterized by the expression and management of emotions.

Directive Style

A leadership approach characterized by giving clear, explicit instructions and expecting compliance.

Excess Zone

A state or area where something exists in quantities or amounts greater than necessary or desired.

Secure And Confident

Describes a state of being wherein an individual feels self-assured and stable in their abilities, decisions, and self-worth.