In general, firms with ____ risk and ____ earnings growth prospects will have higher P/E multiples.
A) low; low
B) high; low
C) low; high
D) high; high

Question

Quizplus · Accepted Answer

Firms with low risk and high earnings growth prospects are more attractive to investors, leading to higher demand for their stocks. This increased demand typically results in higher price-to-earnings (P/E) multiples, as investors are willing to pay more for each dollar of earnings in anticipation of future growth.

In General, Firms with ____ Risk and ____ Earnings Growth

In General, Firms with Risk and Earnings Growth