Firms with Higher Expected Growth Rates Tend to Have P/E

question 92

Multiple Choice

Firms with higher expected growth rates tend to have P/E ratios that are ________ the P/E ratios of firms with lower expected growth rates.

• A) higher than
• B) equal to
• C) lower than
• D) There is not necessarily any linkage between risk and P/E ratios.

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Definitions:

Concentration Effect

The impact that changing the concentration of reactants has on the rate of a chemical reaction.

Reaction Speed

The rate at which reactants are converted into products in a chemical reaction, influenced by factors like temperature, concentration, and presence of catalysts.

AgNO3

Silver nitrate, an inorganic compound with antiseptic properties, used in medical applications and analytical chemistry.

Increased Speed

A situation where the velocity or pace at which an object or process operates is raised.