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Unformatted text preview: ● Pitfalls: no theoretical underpinnings
AAPL Industry Sector S&P
500 P/E 12.50 17.74 6.32 14.41 PEG 0.68 2.11 1.05 1.62 What’s S& P 500?
The S&P 500, or the Standard & Poor's 500,
is a stock market index based on the market
capitalization of 500 leading companies publicly
traded in the U.S. stock market, as determined
by S&P. Other market ratios (2)
Market-to-book ratio =
Market value per share /
Book value per share
● Other measure to assess the value
generated by the firm. Cycles and economic activity
● Firms are subject to growth fluctuations.
● Also some seasonality: Summer vs. Winter
● So in good times, sales & earnings
● in bad times, sales & earning decrease Cycles and economic activity (2)
● Is P/E a good ratio to measure the
fundamental value of the firm?
● cyclically adjusted price...
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This document was uploaded on 02/23/2014 for the course CB 3410 at City University of Hong Kong.
- Spring '14