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A High Price/Earnings Ratio for a Company's Share Could Signify

Question 2

Multiple Choice

A high Price/Earnings ratio for a company's share could signify:

A) The company has a high debt to equity ratio
B) The stock market perceives relatively high risk in the share
C) The stock market perceives low potential for share price growth
D) Dividends are low relative to the share price
E) The stock market believes EPS is going to increase.

Correct Answer: