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4. A firm has a P/B ratio that equals the industry average and its ROCE is lower than the industry  average, which implies A. The firm has a higher P/E ratio than average firms in the industry B. The firm has a lower P/E ratio than average firms in the industry. C. The firm has the same P/E ratio as average firms in the industry. D. The P/E ratio cannot be determined.

4. A firm has a P/B ratio that equals the industry average and its ROCE is lower than the industry  average, which implies A. The firm has a higher P/E ratio than average firms in the industry B. The firm has a lower P/E ratio than average firms in the industry. C. The firm has the same P/E ratio as average firms in the industry. D. The P/E ratio cannot be determined.

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 91PSA: A Comparing Financial Ratios Presented below are selected ratios the four firms, Badgley is a heavy...
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4. A firm has a P/B ratio that equals the industry average and its ROCE is lower than the industry 
average, which implies
A. The firm has a higher P/E ratio than average firms in the industry
B. The firm has a lower P/E ratio than average firms in the industry.
C. The firm has the same P/E ratio as average firms in the industry.
D. The P/E ratio cannot be determined.

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