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.

Company PB Trailing PE Forward PE Apple . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.96 13.64 11.33 Outerwall . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.17 11.35 11.94 PPG Industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.16 8.82 20.10 Hershey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.32 28.24 23.65