Question

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.


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  • CreatedFebruary 20, 2015
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