CFA Practice Question
If two stocks (A and B) have the same positive P/E, and stock A has a higher P/S, we can conclude that:
B. B has a higher net profit margin.
C. We cannot conclude anything as P/S and P/E are unrelated.
A. A has a higher net profit margin.
B. B has a higher net profit margin.
C. We cannot conclude anything as P/S and P/E are unrelated.
Correct Answer: A
Net profit margin = E/S = (P/S) / (P/E).
User Contributed Comments 1
User | Comment |
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alejandroc | All equal, obviously. |