A P/E Ratio Is Calculated in the Middle of the Accounting

question 13

Multiple Choice

A P/E ratio is calculated in the middle of the accounting year.For a given share price,the company could use the most recent annual EPS,or it could use the total of the most recent four quarterly EPS numbers.Which of the following statements is not true?

• A)The ratio will be larger if the most recent annual EPS is used when earnings are falling.
• B)The ratio will be smaller if the EPS for the last four quarters are used when earnings are rising.
• C)The ratio will be smaller if the most recent annual EPS is used when earnings are falling.
• D)The ratio will be larger if the EPS for the last four quarters are used when earnings are falling

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Definitions:

Latin America

A region in the Western Hemisphere that predominantly speaks Romance languages, including Spanish and Portuguese, encompassing Central and South America as well as the Caribbean.

Ataque De Nervios

A culturally specific syndrome among Latin American populations characterized by intense emotional upset, acute anxiety, anger, or grief, accompanied by screaming and crying.

Severe Depression

A mental disorder characterized by a relentless gloomy mood or lack of enthusiasm for activities, resulting in major impairment in daily routines.

Major Depression

A mental health disorder characterized by persistent feelings of sadness, hopelessness, and a lack of interest or pleasure in activities, significantly impacting daily functioning.