Company a and Company B Have Identical Expected Earnings Potential

Multiple Choice

Company A and Company B have identical expected earnings potential but Company B has a higher price-earnings ratio.This discrepancy:

A) can be explained by the difference in share price.
B) can be explained by the fact that Company A pays more dividends.
C) can be explained by the fact that Company A is considered to be riskier than Company
D) cannot be explained.