A Firm's P/E Ratio Tends to Be Higher If ________

question 183

Multiple Choice

A firm's P/E ratio tends to be higher if ________.

• A)its risk and its growth prospects are lower
• B)its risk is higher and its growth prospects are lower
• C)its risk and its growth prospects are higher
• D)its risk is lower and its growth prospects are higher

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Definitions:

Capitalist Development

The process by which economies transition and grow through the principles of capitalism, including private ownership, competitive markets, and the pursuit of profit.

Catholicism

A major branch of Christianity that follows the teachings and practices of the Roman Catholic Church.

Protestant Ethic

A concept in sociology that attributes the rise of modern capitalism to Protestant work values, emphasizing hard work, discipline, and frugality.

Capitalism

An economic system characterized by private ownership of the means of production and the creation of goods or services for profit.