Consider the following data from two companies in very different
Consider the following data from two companies in very different industries. Adobe Systems is a software company. Empire District is an electric utility serving the Midwest. (Amounts except earnings per share and market price are in millions.)


1. Compute the market-to-book ratio, the price-earnings ratio (P-E), and the rate of return on common stockholders’ equity for both Adobe Systems and Empire District. Use ending stockholders’ equity rather than average stockholders’ equity for computing return on equity.
2. Explain what might cause the differences in these ratios between the twocompanies.
Membership TRY NOW
  • Access to 800,000+ Textbook Solutions
  • Ask any question from 24/7 available
    Tutors
  • Live Video Consultation with Tutors
  • 50,000+ Answers by Tutors
OR
Relevant Tutors available to help