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Company A is expected by analysts to generate Earnings Per Share (EPS) in 2020 of $4.10. Company A's stock price is $50 per share. Company

Company A is expected by analysts to generate Earnings Per Share (EPS) in 2020 of $4.10. Company A's stock price is $50 per share.

Company B is expected by analysts to generate Earnings Per Share (EPS) in 2020 of $1.25. Company B's stock price is $75 per share.

Calculate the Price-to-Earnings (P/E) ratio based on 2020 estimated earnings for Company A and Company B.

Why in general might Company B's P/E multiple be higher than Company A's?

*If you knew something about Free Cash Flow (FCF) for each Company, why in general might that be important as you analyze the stock prices of each Company?

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