Price-Earnings Ratio Consider Pacific Energy Company and Atlantic Energy, Inc., both of which reported earnings of $720,000. Without new projects, both firms will continue to generate earnings of $720,000 in perpetuity. Assume that all earnings are paid as dividends and that both firms require a return of 11 percent. a. What is the current PE ratio for each company? b. Pacific Energy Company has a new project that will generate additional earnings of $150,000 each year in perpetuity. Calculate the new PE ratio of the company. c. Atlantic Energy has a new project that will increase earnings by $300,000 in perpetu- ity. Calculate the new PE ratio of the firm