Aaron€™s, Inc., and Rent-A-Center, Inc., are two publicly traded rental companies. They reported the following in their financial statements (in millions of dollars, except per-share amounts and stock prices):

Required:
1. Compute the 2013 ROE for each company. Express ROE as a percentage rounded to one decimal place. Which company appears to generate greater returns on stockholders€™ equity in 2013?
2. Compute the 2013 P/E ratio for each company (rounded to one decimal place). Do investors appear to value one company€™s earnings more than the other€™s? Explain.

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Aaron's, Inc Rent-A-Center, Inc. 2013 2013 2012 2012 121 1,141 1.59 28.32 173 1136 228 29.67 $ 128 S 182 Net income Total stockholders equity Earnings per share Stock price when annual results reported 1,343 2.34 3122 1,464 3.08 35.43