A company whose stock is selling at a P/E ratio greater than the P/E ratio of a market index most likely has
A. an anticipated earnings growth rate which is less than that of the average firm.
B. a dividend yield which is less than that of the average firm.
C. less predictable earnings growth than that of the average firm.
D. greater cyclicality of earnings growth than that of the average firm.
B. a dividend yield which is less than that of the average firm.
Firms with lower than average dividend yields are usually growth firms, which have a higher P/E ratio than average.
You might also like to view...
For which of the following services must a CPA be independent?
a. Audits: Yes; Reviews: Yes; Compilations: Yes b. Audits: Yes; Reviews: Yes; Compilations: No c. Audits: Yes; Reviews: No; Compilations: No d. Audits: Yes; Reviews: No; Compilations: Yes
Which of the following is one of the sources of information for EBM?
A. the best available hypothetical evidence B. the best available statistical evidence C. the best available stakeholder evidence D. the best available organizational evidence
Choose the correct word or words in parentheses. Terry, as well as her brothers, (is, are) an avid soccer fan
The seller is responsible for paying shipping charges and bears the risk of damage or loss in transit if goods are shipped FOB destination.
Answer the following statement true (T) or false (F)