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Calculate the pe ratio for company

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Reference no: EM132674869

Recently, a share of Coca-Cola stock sold for about $43 a share. It's earnings per share at that time was $0.29 for the year. At the same point in time, a share of Pepsi stock sold for about $109 a share and Pepsi's earnings per share was $3.38.

a) Calculate the PE ratio for each company,.

b) Compare the 2 companies, indicating which is more profitable and which seems to be perceived as having greater growth potential. Is it profit or growth potential that makes Pepsi's stock price so much higher than Coke's? How can you tell?

Reference no: EM132674869

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