The P/E ratio for BMI Corporation is 21, and the P/S ratio is 5.2. The industry P/E ratio is 35, and the industry P/S ratio is 7.5. Based on relative valuation, BMI is
A) undervalued on the basis of relative P/E and relative P/S.
B) overvalued on the basis of relative P/E and undervalued on the basis of relative P/S.
C) undervalued on the basis of relative P/E and overvalued on the basis of relative P/S.
D) overvalued on the basis of relative P/E and relative P/S.
E) overvalued on the basis of relative P/E.
Correct Answer:
Verified
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