Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Which of the following statement about P/E is NOT true? 1) All else being equal, a firm will have a higher P/E if its plowback

Which of the following statement about P/E is NOT true?

1) All else being equal, a firm will have a higher P/E if its plowback ratio is higher.

2) All else being equal, a firm will have a lower P/E if its required rate of return is higher.

3) All else being equal, a firm will have a higher P/E if its ROE is higher (assuming plowback ratio is positive).

4) All else being equal, a firm will have a lower P/E if its beta is higher.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Lecture Notes In Introduction To Corporate Finance Volume 1

Authors: Ivan E Brick

1st Edition

9813149892, 9789813149892

More Books

Students also viewed these Finance questions

Question

Who owns your ideas?

Answered: 1 week ago