Question

Determining ROE and Assessing Market Expectations

The PB, trailing PE, and forward PE data follow for four companies. Determine the current ROE for each company.

Company		PB	Trailing PE	Forward PE
Apple		4.18	13.64	11.33
Outerwall		3.39	11.35	11.94
PPG Industries		5.38	8.82	20.10
Hershey		16.54	28.24	23.65

Round answers to one decimal place (ex: 0.2345 = 23.5%)

Company		ROE
Apple		?
Outwall		?
PPG Industries		?
Hershey		?

Answer 1

Relevant equations:

Thus,

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -