KNOWLEDGE CHECK At its peak at the end of 1999, Microsoft had a market cap of $600B. PC sales were booming and most PCs ran on Microsoft software. Revenue was growing 30% per year. The P/E ratio peaked at nearly 80.Ox in 1999. Looking at this chart, what happened in the subsequent 15 years? The decline in the P/E ratio canceled out the decline in earnings and this pushed the market cap up. Earnings grew and this pushed the market cap up. The decline in the P/E ratio more than offset earnings growth and this pushed the market cap down Earnings declined and this pushed the market cap down Click to open/close chart for explanation. 1 to Hide side panel, 2 to save current settings as default view MSFT US Equity 3 Save As 4 Load 9 Actions Graph Fundamentals Monthly Select Securities Add a Security EMSFT US Equity The decline out the declir pushed the Oution TV SY luation Max 20 -248 raluati. 0.61 waluati... waluati... Earnings gre market cap 206 G.ST us self us peers 188 Select Fields Add a Field> EN / Profit Mkt Cap P/E Ann us ma... 4008 361 nt outc... The decline offset earnir the market Otr 40 34 OSB es the you 3008- Earnings de market cap a terawan 108 20 2006- 88 10 Select Chart Layout Single Panel Panel Per Field O Panel Per Security Drag and drop lines to customize Dec 31 1999 Dec 31 Dec 31 2004 Dec 31 2014