12. which of the following statment is FALSE regarding the P/E analysis?

A.P/E ratios tend to be lower when inflation is higher.

B. higher- risk firms will have lower P/E ratios holding all else equal.

C.P/E ratios tend to be higher under the FIFO method during a deflationary period

D.P/E ratios are positively related to the plowback ratio when the required rate of return us smaller than the ROE.

E.None of the above.

13. Investor want low plowback ratios:

A. For all firms

B. when ROE is smaller than the required rate of return.

C. when ROE is greater than the required rate of return.

D.only when they are in low tax brackets

E.when bank interest rates are high.