Which of the following statements is CORRECT?
A) If Firms X and Y have the same P/E ratios,then their market-to-book ratios must also be equal.
B) If Firms X and Y have the same net income,number of shares outstanding,and price per share,then their P/E ratios must also be the same.
C) If Firms X and Y have the same earnings per share and market-to-book ratio,then they must have the same price/earnings ratio.
D) If Firm X's P/E ratio exceeds that of Firm Y,then Y is likely to be less risky and/or be expected to grow at a faster rate.
E) If Firms X and Y have the same net income,number of shares outstanding,and price per share,then their market-to-book ratios must also be the same.

Question

Quizplus · Accepted Answer

No reason for a to be true.b must be true,as EPS and P will be equal.No reason for c to be true.Wrong,because high risk and low growth lead to low P/Es.No reason for e to be true.?

Which of the Following Statements Is CORRECT