Simon Company's year-end balance sheets follow.

At December 31	Current Year	1 Year Ago	2 Years Ago
Assets
Cash	$ 29,126	$ 34,720	$ 35,826
Accounts receivable, net	84,417	59,580	48,714
Merchandise inventory	107,189	79,511	51,387
Prepaid expenses	9,008	9,026	3,941
Plant assets, net	259,039	238,524	218,432
Total assets	$ 488,779	$ 421,361	$ 358,300
Liabilities and Equity
Accounts payable	$ 118,055	$ 72,634	$ 47,769
Long-term notes payable	90,972	96,913	78,392
Common stock, $10 par value	162,500	163,500	162,500
Retained earnings	117,252	88,314	69,639
Total liabilities and equity	$ 488,779	$ 421,361	$ 358,300

For both the current year and one year ago, compute the following ratios:

The companys income statements for the Current Year and 1 Year Ago, follow.

For Year Ended December 31	Current Year		1 Year Ago
Sales		$ 635,413		$ 501,420
Cost of goods sold	$ 387,602		$ 325,923
Other operating expenses	196,978		126,859
Interest expense	10,802		11,533
Income tax expense	8,260		7,521
Total costs and expenses		603,642		471,836
Net income		$ 31,771		$ 29,584
Earnings per share		$ 1.96		$ 1.82

Additional information about the company follows.

Common stock market price, December 31, Current Year	$ 31.00
Common stock market price, December 31, 1 Year Ago	29.00
Annual cash dividends per share in Current Year	0.40
Annual cash dividends per share 1 Year Ago	0.20

For both the current year and one year ago, compute the following ratios: 1. Return on equity. 2. Dividend yield. 3a. Price-earnings ratio on December 31. 3b. Assuming Simon's competitor has a price-earnings ratio of 7, which company has higher market expectations for future growth?