Which of the following statements is CORRECT? a. The price/earnings (P/E) ratio tells us how much investors are willing to pay for a dollar of current earnings. In general, investors regard companies with higher P/E ratios as more risky and/or less likely to enjoy higher future growth. O b. The return on common equity (ROE) is generally considered less significant, from a stockholder's viewpoint, than the return on total assets (ROA) c. The advantage of the basic earning power ratio (BEP) over the return on total assets for judging a company's operating efficiency is that the BEP does not reflect the effects of debt and taxes. Od. Suppose you are analyzing two firms in the same industry. Firm A has a profit margin of 10% versus a margin of 8% for Firm B. Firm A's total debt to total capital ratio is 70% versus 20% for Firm B. Based only on these two facts, you cannot reach a conclusion as to which firm is better managed because the difference in debt not better management, could be the cause of Firm A's higher profit margin. e. Other things held constant, the less debt a firm uses, the lower its return on total assets will be