Question: Selected financial data is provided as follows: Required: 1. Calculate the return on equity for 2015. How does it compare with the return on equity

Selected financial data is provided as follows:

Required:
1. Calculate the return on equity for 2015. How does it compare with the return on equity for 2014?
2. Calculate the return on the market value of equity for 2015. How does it compare with the return on the market value of equity for 2014?
3. Why is the return on the market value of equity so much lower than the return on equity?
4. Calculate the price-earnings ratio for 2015. How does it compare with the price-earnings ratio for 2014? Is the company trading at a higher or lower price per dollar of earnings in2015?

(S in millions) Sales Net income Total assets Total iabilities Stockholders' equity 2013 S14.526 15,763 S15,943 778 S7,564 S7,838 S8,544 S3,177 S3,564 S3,370 4,3874,74 5,174 S7,564 S7,838 S8,544 2015 2014 967 833 Totl iabilities and stockholders equity Average shares outstanding (in millions) Average stock price 694 791 816 S16 S19 S18

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Requirement 1 in millions Net Income Average Stockholders Equity Return on Equity 2015 967 4387 4274 ... View full answer

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