There were over 38,000 McDonald’s Company restaurants in 120 countries as of December 31, 2019. Shake Shack, Inc., a much newer fast-food restaurant company, began operations as a hot dog cart in 2001. It incorporated on September 23, 2014, and had it initial public offering of stock on February 4, 2015. As of December 31, 2019, it had 275 restaurants operating in 30 states and 15 countries. The following data were taken from the companies’ December 31, 2019, annual reports.

Required
a. Compute the price-earnings ratios for each company.
b. Which company’s future performance did the financial markets appear to be more optimistic about?
c. Provide some reasons why the market may view one company’s future more optimistically than the other.

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Net earnings (in thousands) Earnings per share The following data were taken from public stock-price quotes: Stock price per share on the day after each company's earnings were announced. McDonald's $6,025,400 $ 7.88 $ 216.18 Shake Shack $19,827 $ 0.63 $ 63.07