You are evaluating two equity investments. Accelerate Inc. (Accelerate) is currently valued at $50.00 per share, and its estimated earnings per share for 2022 are $2.00 per share. The market expects Accelerate to continue growing its earnings at approximately 20% per year. Rocket Corp. (Rocket) is current valued at $100.00 per share, and its estimated earnings for 2022 are $4.00 per share. The market expects Rocket to continue growing its earnings at approximately 30% per year.

a.Based in ONLY looking at the stock price of Accelerate and Rocket (and no other factors), which stock is more attractive as a potential investor? Why?

b.Now consider each companys expected 2022 earnings per share. To the closest whole integer, what earnings multiple does Accelerate sell for?

c.To the closest whole integer, what earnings multiple does Rocket sell for?

d. Based ONLY on the ratios in part b and part c, which stock is more attractive as a potential investor?

e.Now consider each companys growth prospects. Which company is more attractive as a potential investor?