A Firm Has a ROE Equal to the Industry Average

question 80

Multiple Choice

A firm has a ROE equal to the industry average but its price to book ratio is below the industry average.You know that the firm's _________.

• A) earnings yield is above the industry average
• B) P/E ratio is above the industry average
• C) dividend payout ratio is too high
• D) interest burden must be below the industry average

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Definitions:

Document of Title

A legal document that provides evidence of the right of ownership over goods or real property.

Identification

The process or act of proving or recognizing one's identity, often using documents like ID cards or passports.

Insure

To secure indemnity against potential future loss or damage, typically by obtaining an insurance policy.

Collect Payment

the act of receiving money that is owed, typically in exchange for goods or services.