Suppose that a firm has a price-earnings ratio which is higher than a value deemed to be normal. investors tend to infer from this information that a. the firm's bonds will increase in their ratings. b. the firm's bonds will decrease in their ratings. c. the firm's stock is over-valued and one should consider selling the stock. d. the firm's stock is under-valued and one should consider buying the stock. e. the firm will be paying increased dividends.
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