M$15-19.$ Determining ROE and Assessing Market Expectations

The PB$,$ trailing PE$,$ and forward PE data follow for four companies. Determine the current ROE for

each company. Which company do you believe the market expects to have the highest future ROE?

Explain. Note: ROE $=$ PB$/$Trailing PE$.$

Company

PB

Trailing PE

Forward PE

Apple $($AAPL$)$

$............$

$10\mathrm{.}20$

$18\mathrm{.}56$

$18\mathrm{.}68$