Which of the Following Statements Is FALSE

question 29

Multiple Choice

Which of the following statements is FALSE?

• A) We can estimate the value of a firm's shares by multiplying its current earnings per share by the average price-earnings ratio of comparable firms.
• B) For valuation purposes, the trailing price-earnings ratio is generally preferred, since it is based on actual not expected earnings.
• C) Forward earnings are the expected earnings over the coming 12 months.
• D) Trailing earnings are the earnings over the previous 12 months.

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Definitions:

Output

The total quantity of goods and services produced by a business, industry, or economy within a specified period.

Competition

The rivalry among businesses or individuals for resources, customers, and market share.

High Wages

Refers to compensation levels that are significantly above the average for a job or industry, typically in response to skill shortages, high demand, or exceptional performance.

High Productivity

The state of achieving a significant amount of output per unit of input, enhancing efficiency and effectiveness in production or work.