Companies A and C each reported the same earnings per share (EPS), but Company A's stock trades at a higher price. Which of the following statements is CORRECT?
A. Company A trades at a higher P/E ratio.
B. Company A probably has fewer growth opportunities.
C. Company A is probably judged by investors to be riskier.
D. Company A must have a higher market-to-book ratio.
E. Company A must pay a lower dividend.
Answer: A
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