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Toms Coffee has a price earnings ratio of 17. First Mug has a price-earnings ratio of 14. You know with certainty that Toms Coffee stock:

Toms Coffee has a price earnings ratio of 17. First Mug has a price-earnings ratio of 14. You know with certainty that Toms Coffee stock: Earns a greater profit per share than does one share of First Mug stock. Represents a larger percentage of firm ownership than does one share of First Mug. Sells at a lower price per share than one share of First Mug. Has a higher market price per dollar of earnings than one share of First Mug. Has a higher price than one share of stock in First Mug.

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