Growth Stocks Would Have the Following Characteristics

question 51

Multiple Choice

Growth stocks would have the following characteristics:

• A) Low price/book, high price/earnings.
• B) Low price/book, low price/earnings.
• C) High EPS growth, high profitability.
• D) Low EPS growth, high profitability.
• E) None of the above.

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Definitions:

Price of Capital

The cost associated with acquiring capital, including the interest or dividends paid to access funds or the rental rates paid for physical capital.

Marginal Resource Cost

Marginal resource cost refers to the additional cost incurred by employing one more unit of a resource, such as labor or capital, in production.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a resource or factor of production.

Employment

The condition of having paid work; the extent to which available labor resources are being utilized in the economy.