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1)  Discuss how risk and profitability factors cause differences in price-earnings ratios across firms

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1)  Discuss how risk and profitability factors cause differences in price-earnings ratios across firms. Explain the difference between abnormal and normal earnings.

2) A firm's value-to-book and market-to-book ratios may differ from one for a number of reasons. Discuss how a successful internally funded research and development program would create a situation where the value-to-book and market-to-book ratios differ from one.

100 words with reference. No plagarism!