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By the same argument, stocks with low ratios should be:
AShorter, seasonal firms
BStabler, mature firms
CSmaller, newer firms
DStronger, foreign firms
Answer & Solution
Correct answer: B. Stabler, mature firms
1. Expectations are more modest.
2. The business is settled.
3. They should be stabler, more mature organisations.
_Source: OpenStax Principles of Finance 2e, Chapter 11, Stocks and Stock Valuation._
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