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Inc.'s income was only slightly greater than zero last year because of the pandemic. On the bright side, investors believe that the bad performance is
Inc.'s income was only slightly greater than zero last year because of the pandemic. On the bright side, investors believe that the bad performance is only temporary, and will be back to its normal track in two years. However, investors are pessimistic about the firm's long-term future and expect long-term returns on common equity will be very close to its cost of equity of 8%. Judging solely from the information given, which of the following pricing multiples are most likely to be observed? P/B = 0.58, Forward P/E = 7.25, Trailing P/E = 16.88 P/B = 0.60, Forward P/E = 10.98, Trailing P/E = 13.04 P/B = 1.02, Forward P/E = 12.25, Trailing P/E = 10.92 P/B = 1.04, Forward P/E = 25.05, Trailing P/E = 22.16 P/B= 2.58, Forward P/E = 20.13, Trailing P/E = 18.75
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