Based on the Finical accounting theory( William R. Scott)Ch1-CH5

please explain

Question 21 (1 point) Listen Oak Ltd. and Ash Ltd. operate lumber production plants in British Columbia. Oak Ltd. uses more conservative accounting policies than Ash Ltd. Otherwise Oak Ltd. and Ash Ltd. are the same. Both Oak Ltd. and Ash Ltd. reported the same net income this year and last year, and this year's net income is higher than last year. Which firm would you expect to have the greater security market response (ERC - Earnings Response Coefficient) to this good earnings news? Neither Oak Ltd. or Ash Ltd., the expected security market response would be the same for both companies because they have the same reported net income Oak Ltd. would be expected to have a higher ERC because it uses more conservative accounting polies Ash Ltd. would be expected to have a higher ERC because they have more debt Oak Ltd. would be expected to have a lower ERC because they are a growing company