The Price/earnings Ratio Would Be Expected to Increase as the Cost

question 66

True/False

The price/earnings ratio would be expected to increase as the cost of equity capital increases, all other things equal.

---

Definitions:

Savings Account

An account in a bank or financial institution where the main amount is safe and earns a small amount of interest.

Interest

The charge for the privilege of borrowing money, typically expressed as an annual percentage rate.

Future Value

The value of an investment at a specified point in the future, accounting for factors like interest rates and compounding.

Payment

The transfer of money, or its equivalent, from one party to another in exchange for goods, services, or to fulfill a legal obligation.