A firm has a market to book value ratio that is equivalent to the industry average and an ROE that is less than the industry average,which implies _______.
A) the firm has a higher P/E ratio than other firms in the industry
B) the firm is more likely to avoid insolvency in the short run than other firms in the industry
C) the firm is more profitable than other firms in the industry
D) the firm is utilizing its assets more efficiently than other firms in the industry
E) none of these

Question

Quizplus · Accepted Answer

The Answer of A firm has a market to book value ratio that is equivalent to the industry average and an ROE that is less than the industry average,which implies _______.
A) the firm has a higher P/E ratio than other firms in the industry
B) the firm is more likely to avoid insolvency in the short run than other firms in the industry
C) the firm is more profitable than other firms in the industry
D) the firm is utilizing its assets more efficiently than other firms in the industry
E) none of these

A Firm Has a Market to Book Value Ratio That