In early 1990, major Tokyo Stock Exchange issues sold for an average 60 times earnings, more than four times the 13.8 price/earnings ratio for the S&P 500 at that time. According to Business Week (February 12, 1990, p. 76), ''Since p-e ratios are a guide to a company's cost of equity capital, this valuation gap implies that raising new equity costs Japanese companies less than 2% a year, vs. an average 7% for the U.S.'' Comment on this statement.