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Question
Companies A and C each reported the same earnings per share (EPS), but Company A's stock trades at a higher price. Which of the following statements is CORRECT?a. Company A trades at a higher P/E ratio.
b. Company A probably has fewer growth opportunities.
c. Company A is probably judged by investors to be riskier.
d. Company A must have a higher market-to-book ratio.
e. Company A must pay a lower dividend.
Answer
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