Which of the Following Most Likely Explains Why a Corporation's

question 35

Multiple Choice

Which of the following most likely explains why a corporation's stock trades at a very high price-earnings ratio?

• A) Investors expect the corporation to have higher earnings in the future.
• B) The corporation pays a very low dividend on its stock.
• C) The corporation has several classes of stock outstanding.
• D) The corporation is large with very low risk.

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Definitions:

Curriculum Mastery

The extent to which students have learned and are able to demonstrate knowledge and skills as defined by educational standards and goals.

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The expression of disapproval based on perceived mistakes or faults.

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Information given to a person or system about its performance, intended to reinforce strengths or address weaknesses.

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A psychological condition in which an individual experiences excessive fear or anxiety about being separated from attachment figures.