Aaron's, Inc., and Rent-A-Center, Inc., are two publicly traded rental companies. They reported the following in their 2010 financial statements (in millions of dollars, except per share amounts and stock prices):

Required:
1. Compute the 2010 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 2010?
2. Compute the 2010 P/E ratio for each company (rounded to one decimal place). Do investors appear to value one company more than the other? Explain.

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Aaron's, Inc. Rent-A-Center, Inc. 2010 2009 2010 2009 Net income Total stockholders' equity Earnings per share Stock price $118 979 1.44 23.85 $ 113 887 1.38 16.02 $ 172 1,354 2.60 32.14 $ 168 1,248 2.52 22.24 when annual results reported