Check my workCheck My Work button is now enabled Item 13 Consider Pacific Energy Company and U S Bluechips, Inc , both of which reported earnings of $964,000 Without new projects, both firms will continue to generate earnings of $964,000 in perpetuity Assume that all earnings are paid as dividends and that both firms require a return of 12 percent a What is the current PE ratio for each company (Do not round intermediate calculations and round your answer to 2 decimal places, e g , 32 16 ) b Pacific Energy Company has a new project that will generate additional earnings of $114,000 each year in perpetuity Calculate the new PE ratio of the company (Do not round intermediate calculations and round your answer to 2 decimal places, e g , 32 16 ) c U S Bluechips has a new project that will increase earnings by $214,000 each year in perpetuity Calculate the new PE ratio of the company (Do not round intermediate calculations and round your answer to 2 decimal places, e g , 32 16 )

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Question: Check my workCheck My Work button is now enabled Item 13 Consider Pacific Energy Company and U.S. Bluechips, Inc., both of which reported earnings of

Check my workCheck My Work button is now enabled

Item 13

Consider Pacific Energy Company and U.S. Bluechips, Inc., both of which reported earnings of $964,000. Without new projects, both firms will continue to generate earnings of $964,000 in perpetuity. Assume that all earnings are paid as dividends and that both firms require a return of 12 percent.

a.	What is the current PE ratio for each company? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
b.	Pacific Energy Company has a new project that will generate additional earnings of $114,000 each year in perpetuity. Calculate the new PE ratio of the company. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
c.	U.S. Bluechips has a new project that will increase earnings by $214,000 each year in perpetuity. Calculate the new PE ratio of the company. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

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