Given a text T, and several options, according to the question posed in the text T to choose the most appropriate option from the options as the answer, please directly output the most appropriate option, do not need to output the explanation.

Cátia Pinho is a supervisor in the equity research division of Suite Securities. Pinho asks Flávia Silveira, a junior analyst, to complete an analysis of Adesivo S.A., Enviado S.A., and Gesticular S.A.Pinho directs Silveira to use a valuation metric that would allow for a meaningful ranking of relative value of the three companies’ shares. Exhibit 1 provides selected financial information for the three companies.
| Exhibit l.Selected Financial Information for Adesivo, Enviado, and Ges ticular |
| Adesivo | Enviado | Ges ticular |
| Stock's current price | 14.72 | 72.20 | 132.16 |
| Diluted EPS(last four quarters) | 0.81 | 2.92 | -0.05 |
| Diluted EPS(next four quarters) | 0.91 | 3.10 | 2.85 |
| Dividend rate(annualized most recent dividend) | 0.44 | 1.24 | 0.00 |


Silveira reviews underlying trailing EPS for Adesivo. Adesivo has basic trailing EPS of R$0.84. Silveira finds the following note in Adesivo’s financial statements:“On a per share basis, Adesivo incurred in the last four quartersi. from a lawsuit, a non-recurring gain of R$0.04; andii. from factory integration, a non-recurring cost of R$0.03 and a recurring cost of R$0.01 in increased depreciation.” Silveira notes that Adesivo is forecasted to pay semiannual dividends of R$0.24 next year.Silveira estimates five-year earnings growth rates for the three companies, which are presented in Exhibit 2.
| Exhibit 2.Earnings Growth Rate Estimates over Five Years |
| Company | Eam ings Growth Rate Estimate(%) |
| Adesivo | 16.67 |
| Enviado | 21.91 |
| Ges ticular | 32.33 |


Pinho asks Silveira about the possible use of the price-to-sales ratio (P/S) in assessing the relative value of the three companies. Silveira tells Pinho:● Statement 1The P/S is not affected by revenue recognition practices.● Statement 2The P/S is less subject to distortion from expense accounting than is the P/E. Pinho asks Silveira about using the Fed and Yardeni models to assess the value of the equity market. Silveira states:● Statement 3The Fed model concludes that the market is undervalued when the market’s current earnings yield is greater than the 10-year Treasury bond yield.● Statement 4The Yardeni model includes the consensus five-year earnings growth rate forecast for the market index. Silveira also analyzes the three companies using the enterprising value (EV)-to-EBITDA multiple.Silveira notes that the EBITDA for Gesticular for the most recent year is R$560 million and gathers other selected information on Gesticular, which is presented in Exhibit 4.
| Exhibit 4.Selected Information on Ges ticular at Year-End(RS milions) |
| Market | Valuee | Market | Value | of | Market | Value | of | Short-Tem |
| of Debt | Common Equity | Preferred Equity | Cash | Investments |
| 1，733 | 6，766 | 275 | 581 | 495 |


Pinho asks Silveira about the use of momentum indicators in assessing the shares of the three companies. Silveira states:● Statement 5Relative-strength indicators compare an equity’s performance during a period with the performance of some group of equities or its own past performance.● Statement 6In the calculation of standardized unexpected earnings (SUE), the magnitude of unexpected earnings is typically scaled by the standard deviation of analysts’ earnings forecasts.
Based on Pinho’s directive and the data from the last four quarters presented in Exhibit 1, the valuation metric that Silveira should use is the:
Option A:price-to-earnings ratio (P/E).
Option B:production-to-demand ratio (P/D).
Option C:earnings-to-price ratio (E/P).

Answer: C