The current market-to-book (M/B) and forward price-earnings (P/E) ratios for two companies, A Ltd. and B Inc., are presented below. The two companies are direct competitors in the same industry sector, produce the same product and sell it to the same set of customers. They have the same scale of operation and the same capital structure. The average values of the market-to-book (M/B) and forward price-earnings (P/E) ratios for the industry sector are also presented below. A Ltd. B Inc. Industry Mean 4.50 4.50 5.00 Price-Earnings (P/E) ratio Market-to-Book (M/B) ratio 0.50 0.75 3.90 Based on this information, which of the following statements can NOT be TRUE? 1. Both firms use the same accounting methods 2. Both firms have positive abnormal earnings (residual income) because both have a market-to-book (M/B) ratio exceeding a value of zero 3. The forecasted earnings for next year is the same for both firms because they have the same forward price-earnings (P/E) ratio 4.B Inc. has experienced a greater growth in its book value than has A Ltd. because it has a higher market-to-book (M/B) ratio The reformulated Income Statement for a company with a 30% tax rate is presented below. Core Operating Income from Sales (before tax) Core Other Operating Income (before tax) Unusual Operating Income (before tax) Interest Income (before tax) Interest Expense (before tax) Profit Before Tax 1,000 400 200 250 110 1,740 Income tax expense 550 Based on this information, what is the tax allocation to Core Operating Income from Sales? O 1.550 O 2.412 O 3.522 4.328 Suppose that you have been provided with the following financial information about a company. 2019 2020 352 323 50 20 Common Shareholders Equity (S/E) Cash dividends Common share repurchases Common share issues 0 45 13 60 In addition to this information, you have also been informed that the company has net financial obligations (NFO) of 25 in 2019 and 35 in 2020, and net financial expenses of 3 in 2019 and 4 in 2020. Based on this information, what is the company's free cash flow (FCF) for 2020? O 1.-39 O 2.-1 O 3.-30 O 4.-24