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Define the price earnings ratio

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Reference no: EM132642029

Use the information in the following table to answer the questions that follow:

Dividend yield PE (price to earnings) PB (price to book)

Country (2009 vs 2018) ratio (2009 vs 2018) ratio (2009 vs 2018)

China 3.5% vs 2.0% 9.2x vs 14.7x 1.6x vs 1.9x

Germany 6.3% vs 2.8% 7.6x vs 16.0x 1.0x vs 1.8x

Japan 2.9% vs 2.1% 10.6x vs 14.1x 0.9x vs 1.4x

UK 6.0% vs 4.0% 6.4x vs 17.2x 1.2x vs 1.8x

US 3.3% vs 1.9% 11.8x vs 23.1x 1.5x vs 3.4x

1. Define dividend yield and explain how it can be used in investment decisions, referring to the information in the table

2. Define the price earnings ratio and explain how it can be used in investment decisions, referring to the information in the table

3. Define the price to book value and explain how it can be used in investment decisions, referring to the information in the table

4. Based on the ratios in the table, is it possible to say that the shares in any of the countries are undervalued? Motivate your answer

Reference no: EM132642029

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