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 80.0x 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 declined and this pushed the market cap down The decline in the P/E ratio more than offset earnings growth and this pushed the market cap down Eamingo grow and this pushed the market cap up EART: Click to open/close chart