Valuation Ratios

11. Companies growing faster than the S&P500 should probably have P/E Ratios greater than that of the S&P500. True or False

12. Companies growing about as fast as the S&P500 should have Relative P/Es of around 2.0. True or False

13. All else equal, we would prefer a company with a lower-Price to Sales Ratio, because it is cheaper. True or False

14. Price to Sales can be thought of as Stock Price/Sales per Share or Market Capitalization/Sales. True or False

15. Price to Sales is a better valuation measure than Price to Earnings. True or False

16. Price to Book is computed as Stock Price / (Stockholders Equity/Shares Outstanding). True or False

17. Price to Book is essentially market value divided by book value. True or False

18. A book value of 0.5 typically indicates a company with a strong growth outlook. True or False

19. Price to Book is the most reliable valuation multiple of the ones we have studied. True or False

20. Dividends provide an income stream somewhat akin to receiving interest payments from lending money to a corporation. True or False