Question: Here are some data for five companies in the same industry: You have been asked to calculate a measure of the industry price?earnings ratio. Discuss

Here are some data for five companies in the same industry:

Company Code A B D E $ 10 $ 6.67 -$ 1

You have been asked to calculate a measure of the industry price?earnings ratio. Discuss the possible ways that you might calculate such a measure. Does changing the method of calculation make a significant difference to the end result?

Company Code A B D E $ 10 $ 6.67 -$ 1 $ 6.67 Net income (millions) Total book assets (millions) $ 5 $30.0 $300 $120.00 $50 $120.00 Shares outstanding (millions) Share price 4 2 5 10 $100 $ 5 $ 50 $ 8 $ 10

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