Which company would you expect to have the best potential

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Reference no: EM132719601

Problem - The following table shows the stock price, earnings per share, and dividends per share for Alphabet Inc. (GOOG), PepsiCo, Inc. (PEP), and Caterpillar Inc. (CAT) for a recent year:

 

Alphabet

PepsiCo

Caterpillar

Market price of common stock at year-end

$778.01

$99.92

$67.96

Earnings per share

22.84

3.71

4.23

Dividends per share

0.00

2.76

3.01

Required -

1. For each company, determine the:

a. Price-earnings ratio. Round to the nearest cent.

b. Dividend yield. Round to one decimal place.

2. Based on the information available, which company would you expect to have the best potential for future common stock price appreciation? Why?

Reference no: EM132719601

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