11. Price-Earnings Ratio Consider Black Company and Blue Inc., both of which reported earnings of $1.5 million. Without new projects, both firms will continue to generate earnings of $1.5 million in perpetuity. Assume that all earnings are paid as dividends and that both firms require a return 12 percent. Required: (15Marks / 5' Each) (1) What is the current PE for each company? (2) Black Company has a new project that will generate additional earnings of $300,000 each year in perpetuity. Calculate the new PE ratio of the company. (3) Blue Inc. has a new project that will increase earnings by $450,000 each year in perpetuity. Calculate the new PE ratio of the company