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ENG 111 Winter 2014 HW 2

The average market pe ratio the average pe ratio

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Unformatted text preview: nly on retained earnings without any other financing, what would the new growth rate be for each company? If instead, each decides to keep their Debt/Equity ratio as before, what would their growth rate be? Question 5: Yahoo is not happy with its ROE number. Considering DU PONT identity, what would you recommend they do to improve their ROE ? The interest rates are historically at a very low level these days. Would this affect your recommendation? Question 6: Following chart shows the P/E ratio for Google over the years. The average market P/E ratio (the average P/E ratio of the most significant companies in terms of their size) over the same period was about 20. What are the two main reasons of a high P/E ratio? Why do you think Google’s P/E ratio has a downward trend? Question...
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