There were 36,899 McDonald’s Company restaurants in 120 countries as of December 31, 2016. 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 its initial public offering of stock on February 4, 2015. As of December 31, 2016, it had 114 restaurants operating in 16 states and 13 countries. The following data were taken from the companies’ December 31, 2016, annual reports.

Required
a. Compute the price-earnings ratios for each company as of February 27, 2017.
b. Which company’s future performance did the financial markets appear to be more optimistic about as of February 27, 2017?
c. Provide some reasons why the market may view one company’s future more optimistically than the other.

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McDonald's Shake Shack Net earnings (in thousands) Earnings per share The following data were taken from public stock-price quotes: Stock price per share on February 27, 2017 (Two months after the end of their 2016 fiscal years) $12,446 $ 0.54 $4,686,500 5.49 $ 36.75 126.99