Which of the following best describes typical share prices (in relation to PER) for unquoted firms, as compared with prices for quoted firms?
A) Shares for the two types are roughly equal in price.
B) Shares for unquoted firms are typically sold at significantly higher prices.
C) There is no clear trend between the prices.
D) Shares for unquoted firms are typically sold at significantly lower prices.

Question

Quizplus · Accepted Answer

Typically, share prices for unquoted firms are sold at significantly lower prices compared to quoted firms. This is because there is less information available on unquoted firms, and they are often less liquid, which makes them riskier investments. As a result, investors demand a higher return and are willing to pay less for the shares. The Price-to-Earnings Ratio (PER) for unquoted firms may be lower than for quoted firms, reflecting the lower share price.

Which of the Following Best Describes Typical Share Prices (In