Multiple Choice
Cleveland Co.'s price/earnings ratio is 15.3.Its closest competitor,Walt,Inc.has a Price/Earnings ratio of 9.4.Which of the following would not be a valid conclusion to draw from a comparison of the two companies' Price/Earnings ratios?
A) Cleveland Co.'s stock is overpriced.
B) Investors believe Cleveland Co.has a brighter future than Walt,Inc.
C) Cleveland has been more profitable than Walt,Inc.
D) The stock price of Cleveland Co.has been bid up due to rumors of a merger.
Correct Answer:
Verified
Correct Answer:
Verified
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