Assume that two companies in the same industry have equal earnings. Why might these companies have different
Question:
Assume that two companies in the same industry have equal earnings. Why might these companies have different price-earnings ratios? If a company has a price-earnings ratio of 20 and reports earnings per share for the current year of $4, at what price would you expect to find the stock selling on the market?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 85% (7 reviews)
Priceearnings ratios reflect investors expectations concerning future earnings ...View the full answer
Answered By
Branice Buyengo Ajevi
I have been teaching for the last 5 years which has strengthened my interaction with students of different level.
4.30+
1+ Reviews
10+ Question Solved
Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Question Posted:
Students also viewed these Managerial Accounting questions
-
Two profitable companies in the same industry have similar total stockholders' equity. However, one company has most of its equity balance in common stock, while the other company has most of its...
-
You are comparing two companies in the same industry. You have determined that Morris Corp. depreciates its plant assets over a 40-year life, whereas Kiram Corp. depreciates its plant assets over a...
-
Why might two companies in the same industry have different cost systems?
-
9. Let x = (1.11... 111000...) 26, in which the fractional part has 26 1's followed by O's. For the Marc-32, determine x, x+, f(x), x-xx-x, xx, and lx-fl(x)/x.
-
What account is credited when a company receives donated assets? What is the rationale for this choice?
-
While moving in, a new homeowner is pushing a box across the floor at a constant velocity. The coefficient of kinetic friction between the box and the floor is 0.41. The pushing force is directed...
-
Show that for the bivariate normal distribution (a) independence implies zero correlation; (b) zero correlation implies independence.
-
Given all the information, explain why the following components of the new agreement are predictable outcomes. a. The new agreement gives a $5,000 signing bonus to eligible UAW-represented GM...
-
I would utilize the following steps below in simulation too switch from an B2C model to a B2B model: Locate potential B2B customers - Locate businesses that might be interested in purchasing goods or...
-
Kofi Allon, who is 32 years old and single, is employed as a technical consultant for a large electronics distributor. He lives at 678 Birch Street, LaMesa, CA 91941. Kofi's Social Security number is...
-
What is the basic purpose for examining trends in a companys financial ratios and other data? What other kinds of comparisons might an analyst make?
-
Would you expect a company in a rapidly growing technological industry to have a high or low dividend payout ratio?
-
Calculate the change in entropy when the pressure of 70.9 g of methane gas is increased isothermally from 7.00 kPa to 350.0 kPa. Assume ideal behavior.
-
(b) (7 points) For a given input array A: < 1, 2, 5, 3, 4, 7, 6, 9, 8 >, what is the sequence of numbers in A after calling Build-Max-Heap(A)? Please show the intermediate trees. Algorithm 2...
-
a) Given the following MATLAB code, determine the final values of x and y. (5 marks) x=3--2 <2^2==6 y - 3:3:14 b) Given that a [1 2 3] and b code; [312], evaluate the following MATLAB a. "b-a (5...
-
A container with volume 1.71 L is initially evacuated. Then it is filled with 0.246 g of N2. Assume that the pressure of the gas is low enough for the gas to obey the ideal-gas law to a high degree...
-
Suppose a giant human grows each year a random amount whose average is 49cm and whose standard deviation is 30cm. If the amount grown each year is independent of every other year, what's the...
-
Sandhill Corporation manufactures several types of accessories. For the year, the gloves and mittens line had sales of $489,000, variable expenses of $367,000, and fixed expenses of $142,000....
-
(continuation) Identify the following data as cross-section, time series, or panel data: a. Blood pressure of one woman every two years. b. The average HDL cholesterol level of the men in 1948, 1958,...
-
What are the four types of poultry production systems? Explain each type.
-
When 10 BF 3 is bombarded with neutrons, the boron-10 undergoes an a decay, but the F is unaffected. A 0.20-mol sample of 10 BF 3 contained in a 3.0-L container at 298 K is bombarded with neutrons...
-
Discuss the differences that exist in the treatment of bank overdrafts under GAAP and IFRS.
-
Describe the treatment of each of the following items under IFRS versus GAAP. (a) Interest paid. (b) Interest received. (c) Dividends paid. (d) Dividends received.
-
The financial statements of Zetar plc are presented in Appendix C. The companys complete annual report, including the notes to its financial statements, Instructions Use the companys annual report to...
-
Consider the following choice problems: Problem 1: A: $50 tomorrow B: $100 in 2 days Problem 2: C: $50 in 12 days D: $100 in 13 days Suppose Amanda is present-biased, with <1,8 < 1. If we are told...
-
C1 C3 $2 C2 C4 $1 B In the figure, battery B supplies 6 V. Find the charge on each capacitor first when only switch S1 is closed. Take C1 1.3p F, C2 2.7 F, C3-3.5 F, and C4 - 4.6 F.
-
n a large office building, each morning office goers have to wait for long time to get an elevator to go to their offices. The building management office receives large number of complaints about...
Study smarter with the SolutionInn App