Solved

Firm a Is High Risk and Firm B Is Low

Question 34

Multiple Choice

Firm A is high risk and Firm B is low risk. Everything else equal, which firm would you expect to have a higher P/E ratio?


A) Firm A
B) Firm B
C) Both would have the same P/E if they were in the same industry
D) There is not necessarily any link between risk and P/E ratios

Correct Answer:

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