Question

Which of the following is most likely to identify

Q: Answer-Which of the following is most likely to identify stocks with high earnings growth rates?

Firms that are growing will have high market value to their book value of equity. As such less book value to market value indicate growth stocks. Higher dividend payout ratio indicates firms with fewer growth opportunities as they not ploughing back their profits for additional investments in infrastructure and research and development. Low price to cash flow per share also indicates value stocks, not growth stocks.

stocks with high earnings growth rates?

A Dividend payout ratio more than 30%

B Price to cash flow per share ratio less than 12

C Book value to Market Value ratio less than 25%

D All of the above

E None of the above

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Which of the following is most likely to identify

Solution