The price/earnings ratio provides important information concerning the stock market’s assessment of the growth potential of a business. The following are price/earnings ratios for selected companies as of the date this book was written. Match the company with its ratio and explain how you made your selections. If you are not familiar with a company, you should visit its website.
Company Price/Earnings Ratio
1. Commerce Bank ............... A. 33
2. Duke Energy .................. B. 12
3. Ford ................... C. 15
4. The Home Depot ... D. Not applicable (no earnings)
5. Motorola .................. E. 20
6. Starbucks ................. F. 13
7. PepsiCo .................. G. 99
8. Continental Airlines ............. H. 8