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Business, 13.08.2021 04:30 stattheman8257

Two online magazine companies reported the following in their financial statements: BusinessWorld Fun and Games
2015 2014 2015 2014
Net income $ 111,500 $108,904 $ 92,920 $172,473
Total stockholders' equity 602,186 527,814 462,151 482,049
Earnings per share 3.50 3.49 2.40 4.28
Stock price when annual results reported 55.15 51.79 33.30 60.45
Required:
1-a. Compute the 2015 ROE for each company. (Round your answers to 1 decimal place.)
1-b. Which company appears to generate greater returns on stockholders' equity in 2015?
i. BusinessWorld
ii. Fun and Games
iii. Both Companies appear to generate the same return on equity
2-a. Compute the 2015 P/E ratio for each company. (Round your answers to 1 decimal place.)
2-b. Which company do investors appear to value more?
i. BusinessWorld
ii. Fun and Games
iii. Both Companies appear to generate the same return on equity

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