Question
You are given the following information about two computer software firms and the S&P Industrials: Company A Company B S&P Industrials P/E ratio 30.00 26.00
You are given the following information about two computer software firms and the S&P Industrials:
Company A Company B S&P Industrials
P/E ratio 30.00 26.00 17.00
Expected annual growth rate 0.18 0.15 0.08
Dividend yield 0.00 0.01 0.03
A). Compute the growth duration of each company stock relative to the S&P Industrials. Do not round intermediate calculations. Round your answers to two decimal places.
Company A: ____________ years
Company B: ____________ years
B). Compute the growth duration of Company A relative to Company B. Do not round intermediate calculations. Round your answer to two decimal places.
_________ years
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