Which of the Following Statements Is Correct

question 22

Multiple Choice

Which of the following statements is correct?

• A) If a firm has the highest price/earnings ratio of any firm in its industry, then, other things held constant, this suggests that the board of directors should fire the president.
• B) If a firm has the highest market/book ratio of any firm in its industry, then, other things held constant, this suggests that the board of directors should fire the president.
• C) Other things held constant, the higher a firm's expected future growth rate, the lower its P/E ratio is likely to be.
• D) The higher the market/book ratio, then, other things held constant, the higher one would expect to find the Market Value Added (MVA).

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Definitions:

Projective Test

A type of personality test designed to let a person respond to ambiguous stimuli, presumably revealing hidden emotions and internal conflicts.

Structured

Characterized by specific rules, patterns, or organized framework.

Narcissistic

A personality trait characterized by an excessive preoccupation with self-image and an exaggerated sense of importance and entitlement.

Obsessive-Compulsive

A condition characterized by uncontrollable, recurring thoughts (obsessions) and behaviors (compulsions) that an individual feels the urge to repeat over and over.