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Author Question: XYZ Corporation has a P/E ratio of 20 and EFG Corporation has a P/E ratio of 10. It is likely that ... (Read 19 times)

j.rubin

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on: Jul 11, 2018
XYZ Corporation has a P/E ratio of 20 and EFG Corporation has a P/E ratio of 10. It is likely that
 
  A) investors expect XYZ's earnings to grow faster than EFG's earnings.
  B) investors believe XYZ stock is overvalued.
  C) investors believe that for the same level of earnings growth, XYZ is a higher risk company.
  D) XYZ's earnings per share are twice the earnings per share of EFG.

Question 2

Accounting supports financial managers by providing all of the following EXCEPT:
 
  A) identifying relevant data related to the activities of the firm.
  B) presenting data in an agreed-upon and standardized form known as generally accepted accounting practices.
  C) summarizing the firm's economic activity in the form of financial statements.
  D) generating revenue for the firm.
Foundations of Finance ¦ Keown, Petty, Martin ¦ 9th Edition
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ergserg

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Reply #1 on: Jul 11, 2018
Answer to Question 1

A

Answer to Question 2

D


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