2 Phobis Co is considering a bid for Danoca Co. Both companies are stock market listed and are in the same business sector. Financial information on Danoca Co, which is shortly to pay its annual dividend, is as follows: Number of ordinary shares 5 million Ordinary share price lex div basis) $3.30 Earnings per share 40,0C Proposed payout ratio 60% Dividend per share one year ago 23.30 Dividend per share two years ago 22.00 Average sector price/earnings ratio 10 Are the following statements true or false? 1 If the P/E ratio of Danoca is lower than the average sector P/E ratio then the market does not view the growth prospects of Danota very favourably 2 if the P/E ratio of Danoca is higher than the average sector ratio then an acquisition by Phobis could result in improved financial performance of Danoca O a. Both statements are false b. Statement 1 is false and statement 2 is true c. Both statements are true O d. Statement 1 is true and statement 2 is false