You are analyzing a stock. You expect that earnings will grow quickly relative to their current level, but the expected return on common stockholders' equity is low.
What levels of the price earnings ratio (P/E) and price to book value ratio (P/BV) would you expect to see (relative to industry average)?
P/E Ratio P/BV Ratio
a) Low Low
b) Low High
c) High High
d) High Low