True or false.  Price Earnings Ratio is best used to compare companies in the same sector.False1True

Which of the following statements is FALSE?a.The most common valuation multiple is the price-earnings (P/E) ratio.b.The intuition behind the use of the P/E ratio is that when you buy a stock, you are in a sense buying the rights to the firm's future earnings and differences in the scale of the firms' earnings are likely to persist.c.A firm's P/E ratio is equal to the share price divided by its earnings per share.d.None of them.e.You should be willing to pay proportionally more for a stock with lower current earnings.

Profitability ratios measure how effectively a firm's managers are using its various resources to achieve profits.True false question.TrueFalse

Comparison of the market price of the share with the earnings per share gives us which ratio?a.Interest coverb.Dividend yieldc.Price/Earnings ratiod.IPO

True or False QuestionTrue or false: Interest rates are rationing devices.True false question.TrueFalse

Other things being equal, the higher the debt to equity ratio, the higher the risk of bankruptcy.Group startsTrue or False