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17. As well as the statements of cash flow, you also have the following stock market information about the company: Last year thank you
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Answer #1

Correct Answer:

d)An investor looking to break up the company will be interested because the market to book value of assets shows that the stock is seriously undervalued is correct answer because due to rising earning per share the PIE ratio will decrease and the stock get undervalued. The investor can make investment in such rising earning per share company.

Incorrect Answers:

a)A conservative investor will not because the earning per share is dropping is the not valid because the earning per share is increasing as compared to last year.

b)A speculative investor will be interested because of very large growth in the market capitalization is incorrect because rising earning per share is not necessarily the market capitalization will increases.

c)An investor looking for well-run operations and moderate growth will be interested, based on the rising P/E ratio and earning is not correct because P/E ratio may decrease due to rising earning per share as compared to last year.

So answer is option (d)

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