Solved

The Valuation Models Using Price to Sales, Price to Earnings

Question 69

Multiple Choice

The valuation models using price to sales, price to earnings, price to book value, price to cash flow, and price to dividends, assume that:


A) there is a historical relationship between these ratios and the current price ratio.
B) when the current price ratio is below the historical ratio, the stock may be undervalued.
C) there is some general accounting relationship between these five ratios, based on historical performance.
D) All of the above are true

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