Which of the following factors tend to increase a company's P/E (price- to-earnings) ratio? Lower expected growth in future earnings and lower uncertainties in future cash flows O Lower expected growth in future earnings and higher uncertainties in future cash flows O Higher expected growth in future earnings and higher uncertainties in future cash flows O Higher expected growth in future earnings and lower uncertainties in future cash flows

Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter14: Valuation: Market-based Approach
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Which of the following factors tend to increase a company's P/E (price-
to-earnings) ratio?
O Lower expected growth in future earnings and lower uncertainties in future
cash flows
O Lower expected growth in future earnings and higher uncertainties in future
cash flows
Higher expected growth in future earnings and higher uncertainties in future
cash flows
Higher expected growth in future earnings and lower uncertainties in future
cash flows
A
Transcribed Image Text:Which of the following factors tend to increase a company's P/E (price- to-earnings) ratio? O Lower expected growth in future earnings and lower uncertainties in future cash flows O Lower expected growth in future earnings and higher uncertainties in future cash flows Higher expected growth in future earnings and higher uncertainties in future cash flows Higher expected growth in future earnings and lower uncertainties in future cash flows A
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