Buy Now and Gerald's EZ Furniture are two publicly traded rental companies. They reported the following in their financial statements (in millions of dollars, except per-share amounts and stock prices):

	Buy Now							Gerald's EZ Furniture
	2016			2015				2016			2015
Net income	$	114		$	166			$	121		$	175
Total stockholders' equity		1,107			1,170				1,345			1,299
Earnings per share		1.52			2.21				2.27			3.01
Stock price when annual results reported		24.82			28.97				27.72			34.73

Required:

1. 1-a. Compute the 2016 ROE for each company. Express ROE as a percentage. TIP: Remember that the bottom of the ROE ratio uses the average stockholders equity.

2. 1-b. Which company appears to generate greater returns on stockholders equity in 2016?

3. 2-a. Compute the 2016 P/E ratio for each company.

4. 2-b. Which company do investors appear to value more?