Question

an analyst is reviewing a report on company x. the report shows a p/e ratio of 10, compared with an industry average of 27. based on the most current quarterly payment, x has a dividend yield of 3.65%. the analyst notices there is a footnote indicating the company has put $1.2 billion away for what it refers to as a rainy day fund. most likely, company x would be considered

Answer 1

The company would be considered conservative or cautious.

Step-by-step explanation:

The analyst is reviewing a report on Company X. The report shows a P/E ratio of 10, compared to the industry average of 27. A P/E ratio measures the valuation of a company based on its earnings. A lower P/E ratio indicates that the company is less expensive relative to its earnings compared to the industry average.

However, the analyst also notices that the company has put $1.2 billion away for a rainy day fund, which indicates that the company may be financially conservative and prepared for potential future challenges. Based on these observations, it is likely that Company X would be considered a conservative or cautious company.