All of the following are accounting factors that can drive a firm's price-earnings ratio in a given period to be higher than that of other firms in the same industry except:
A) non-recurring expenses or losses in that period
B) a greater degree of accounting conservatism that requires expensing R&D or other intangible asset-generating activities
C) a less conservative accounting stance that uses straight-line depreciation rather than accelerated methods
D) a greater degree of accounting conservatism regarding accelerated depreciation of PP&E

Question

Quizplus · Accepted Answer

A less conservative accounting stance that uses straight-line depreciation rather than accelerated methods will result in a lower price-earnings ratio, not a higher one.

All of the Following Are Accounting Factors That Can Drive