Assuming That Other Things Are Constant, the Price Earnings (P/E)

Multiple Choice

Assuming that other things are constant, the price earnings (P/E) ratio:

A) is higher for firms with high growth prospects and lower for riskier firms.
B) is lower for firms with high growth prospects and higher for riskier firms.
C) is not affected by the growth prospects of a firm.
D) is equal to the market price of the share of a firm.
E) is equal to the earnings per share of a firm.