Question
Q3. The table below provides summary data for Johnson & Johnson, along with Procter & Gamble and Merck, two large cap firms that compete in
Q3.
The table below provides summary data for Johnson & Johnson, along with Procter & Gamble and Merck, two large cap firms that compete in many segments of Johnson & Johnson's medical and consumer products businesses.
Johnson & Johnson Procter & Gamble Merck
Stock price (per share) $64.92 $47.65 Book value of equity $39,318 $66,760 $17,560
(in millions)
Common shares 2,893 3,132 2,168
outstanding (in millions)
Net income (in millions) $11,053 $10,340 $4434
Compute the price-to-earnings (PE) ratios for Procter & Gamble and Merck.
What is the average PE ratio for these two companies?
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