Question: You are given the following information about two computer software firms and the S&P Industrials: Company A Company B S&P Industrials - P/E ratio (Company
You are given the following information about two computer software firms and the S&P Industrials:
Company A Company B S&P Industrials
- P/E ratio (Company A: 30.00) (Company B: 27.00) (S&P Industrails: 18.00)
- Expected annual growth rate (A: 0.18) (B: 0.16) (S&P: 0.10)
-Dividend yield (A:0.00) (B:0.01) (S&P: 0.03)
a. Compute the growth duration of each company stock relative to the S&P Industrials. Do not round round intermediate calculations. Round your answer to two decimal plces.
Company A: __________years
Company B: __________years
b. Compute the growth duration of Company A relative to Company B. Do not round round intermediate calculations. Round your answer to two decimal plces.
_____ years.
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