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Consider Pacific Energy Company and U . S . Bluechips, Inc., both of which reported earnings of $ 9 6 2 , 0 0 0
Consider Pacific Energy Company and US Bluechips, Inc., both of which reported earnings of $ Without new projects, both firms will continue to generate earnings of $ in perpetuity. Assume that all earnings are paid as dividends and that both firms require a return of percent. a What is the current PE ratio for each company? Do not round intermediate calculations and round your answer to decimal places, eg b Pacific Energy Company has a new project that will generate additional earnings of $ each year in perpetuity. Calculate the new PE ratio of the company. Do not round intermediate calculations and round your answer to decimal places, eg c US Bluechips has a new project that will increase earnings by $ each year in perpetuity. Calculate the new PE ratio of the company. Do not round intermediate calculations and round your answer to decimal places, eg
Consider Pacific Energy Company and US Bluechips, Inc., both of which reported earnings of $ Without new projects, both firms will continue to generate earnings of $ in perpetuity. Assume that all earnings are paid as dividends and that both firms require a return of percent.
a What is the current PE ratio for each company? Do not round intermediate calculations and round your answer to decimal places, eg
b Pacific Energy Company has a new project that will generate additional earnings of $ each year in perpetuity. Calculate the new PE ratio of the company. Do not round intermediate calculations and round your answer to decimal places, eg
c US Bluechips has a new project that will increase earnings by $ each year in perpetuity. Calculate the new PE ratio of the company. Do not round intermediate calculations and round your answer to decimal places, eg
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