Which firms have relatively high or low price-earnings ratio?
Not what you're looking for?
For each of the following four groups of companies, state whether you would expect them to distribute a relatively high or low proportion of current earnings and whether you would expect them to have a relatively high or low price-earnings ratio.
a. High-risk companies
b. Companies that have recently experienced a temporary decline in profits
c. Companies that expect to experience a decline in profits
d. "Growth" companies with valuable future investment opportunities
Please provide details. Thanks!
Purchase this Solution
Solution Summary
This solution identifies which types of companies have a high/low proportion of current earnings and relatively high/low price-earnings ratio in 137 words.
Solution Preview
a. High-risk companies
The high-risk firms usually have big variance in their return rates, it might be very high or negative. So we would expect high dividend payout ratio. However, since the price is usually low, it might have a low price-earnings ratio. ...
Purchase this Solution
Free BrainMass Quizzes
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.
Operations Management
This quiz tests a student's knowledge about Operations Management
SWOT
This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.
Business Processes
This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.