The current P\/E ratios of Company ABC and XYZ are 8 and 10 respectively. Both companies reinvest 40% of its earnings. Which of the following may help explain the difference in their P\/E ratios? Choose the best answer. <\/p>
<\/p>
A. ABC has a lower ROE<\/p>
<\/p>
B. ABC has a higher discount rate<\/p>
<\/p>
C. All of the above<\/p>
<\/p>
D. None of the above<\/p>", "transcribed_text": "", "related_book": { "title": "Horngrens Financial and Managerial Accounting", "isbn": "9780133851281, 013385129x, 9780134077321, 133866297, 133851281, 9780133851298, 134077326, 978-0133866292", "edition": "5th edition", "authors": "Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/467.jpg", "uri": "\/textbooks\/horngrens-financial-and-managerial-accounting-5th-edition-467", "see_more_uri": "" }, "free_related_book": { "isbn": "1018931317", "uri": "\/textbooks\/neuere-anschauungen-auf-dem-gebiete-der-anorganischen-chemie-1st-edition-978-1018931319-318112", "name": "Neuere Anschauungen Auf Dem Gebiete Der Anorganischen Chemie", "edition": "1st Edition" }, "question_posted": "2024-06-06 03:13:17", "see_more_questions_link": "\/study-help\/questions\/business-management-leadership-2023-June-05", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/what-are-covenants-why-are-covenants-sometimes-included-in-lending", "description": "What are covenants? Why are covenants sometimes included in lending agreements? What purpose do they serve? Why are covenants often stated in accounting terms?", "stars": 3 }, { "url": "\/study-help\/calculus-4th\/evaluate-the-indefinite-integral-using-substitution-if-necessary-in-x-1186787", "description": "Evaluate the indefinite integral, using substitution if necessary. (In x) X -dx", "stars": 3 }, { "url": "\/study-help\/coaching-supervision-a-practical-guide-for-supervisees\/what-counts-most-in-explaining-workrelated-outcomes-objective-or-subjective-1980169", "description": "What counts most in explaining work-related outcomes, objective or subjective worker characteristics? Think of a concrete example when formulating your answer, for instance by focusing on predicting...", "stars": 3 }, { "url": "\/details-about-companyas-liabilities-appear-in", "description": "Details about a companys liabilities appear in a number of places in the annual report. Use Amazon.coms financial statements, including Note 1, to answer the following questions. Amazons financial...", "stars": 3 }, { "url": "\/study-help\/questions\/you-are-given-the-following-information-fixed-floating-firm-a-9882232", "description": "You are given the following information: Fixed Floating Firm A 6.354% LIBOR+ 0.350% Firm B 7.255% LIBOR+ 1.050% Firm A preferred LIBOR+ 0.350% Firm B preferred 7.255% Firm A not preferred 6.354% Firm...", "stars": 3 }, { "url": "\/study-help\/questions\/1-prepare-a-sales-budget-for-january-through-may-the-9586759", "description": "1. Prepare a sales budget for January through May. The selling price per unit is $40.00. The budgeted sales for December is $50,000. January is $40,000. February is 50,000. March is $50,000. And...", "stars": 3 }, { "url": "\/study-help\/questions\/you-have-been-hired-as-a-restaurant-manager-for-a-1006606", "description": "You have been hired as a Restaurant Manager for a new restaurant in downtown Toronto. The owner, Mr. McDavid, has come to you with a request to incorporate sustainability within the business, both...", "stars": 3 }, { "url": "\/study-help\/questions\/1-discuss-the-seven-factors-that-should-be-addressed-when-1005190", "description": "1. Discuss the seven factors that should be addressed when making the business case for a new Information System. There are seven factors that should be addressed when making the business case for a...", "stars": 3 }, { "url": "\/study-help\/questions\/what-condition-could-cause-a-properly-installed-and-maintained-hood-999014", "description": "What condition could cause a properly installed and maintained hood system to fail to control a fire? Use of blow of caps on nozzles Installation of a pre-engineered system A buildup of grease in the...", "stars": 3 }, { "url": "\/study-help\/questions\/create-a-question-that-explores-proving-operational-interoperability-to-be-999043", "description": "Create a question that explores proving operational Interoperability to be a daunting task, particularly due to privacy and technical issues", "stars": 3 }, { "url": "\/study-help\/questions\/question-writre-a-personal-reflection-think-about-how-you-will-1005888", "description": "Question: Writre a personal reflection Think about how you will use the 3 elements of persuasion (logic, emotion, credibility) to engage your reader. The coronavirus pandemic deeply impacted schools...", "stars": 3 }, { "url": "\/study-help\/questions\/the-following-information-applies-to-the-questions-displayed-below-valley-7054877", "description": "[The following information applies to the questions displayed below.] Valley Companys adjusted trial balance on August 31, 2015, its fiscal year-end, follows. Debit Credit Merchandise inventory $...", "stars": 3 }, { "url": "\/study-help\/understanding-financial-accounting\/as-the-accountant-for-mt-pleasant-enterprises-you-are-in-1556359", "description": "As the accountant for Mt. Pleasant Enterprises, you are in the process of preparing the income statement for the year ended December 31, 2003. In doing so, you have noticed that merchandise costing...", "stars": 3 }, { "url": "\/study-help\/understanding-financial-accounting\/the-following-data-are-available-for-2003-regarding-the-inventory-1556360", "description": "The following data are available for 2003, regarding the inventory of two companies: eee eee ee eee o=E==~ Atkins Computers Burbank Electronics Beginning inventory .........--++.++-- $ 40,000 $...", "stars": 3 }, { "url": "\/study-help\/understanding-financial-accounting\/sandras-boutique-was-recently-destroyed-by-fire-for-insurance-purposes-1556355", "description": "Sandras Boutique was recently destroyed by fire. For insurance purposes, she must determine the value of the destroyed inventory. She knows the following information about her 2003 operations before...", "stars": 3 } ], "next_back_navigation": { "previous": "\/study-help\/questions\/you-believe-you-will-need-to-have-saved-600000-by-2337460", "next": "\/study-help\/questions\/your-client-wants-you-to-design-a-3-year-investment-2337462" }, "breadcrumbs": [ { "name": "Study help", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers" }, { "name": "Business", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers\/business" }, { "name": "Finance", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/business-finance" }, { "name": "The current P\/E ratios of Company ABC and XYZ are 8 and", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/the-current-pe-ratios-of-company-abc-and-xyz-are-2337461" } ], "skill_details": { "skill_id": "13", "skill_name": "Finance", "parent_id": "1" } }}