Question 4:

Choose the best answer:

Statement 1: The follow-up P/E ratio that uses earnings from the last four quarters, known as earnings per share for the last 12 months (TTM).

Statement 2: The forecasted P/E (also known as Senior P/E or Prospective P/E), which uses the expected benefits for next year (based on analyst or database estimates).

A) Both statements are false

B) only one of the statements is true

C) Both statements are true

Choose the best answer:

According to the method of comparables,

A) If a company has a higher P/E than its peers, it will be considered overvalued. Assuming that the comparables themselves are overvalued.

B) If an enterprise has a lower P/E than comparable, it will be considered overvalued. Assuming that the comparables themselves are properly evaluated.

C) None of these answers

Choose the best answer:

What is a persistence factor in the context of residual income?

A) A factor that measures how long the residual income is maintained

B) A factor that measures the quality of the companys profits

C) A factor that measures expected growth in residual income