What’s it called when you contact the public with unsolicited offers via a multitude of communication vehicles, and in high freq
1 answer:
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Answer
The answer and procedures of the exercise are attached in the following archives.
Step-by-step explanation:
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
Answer: C. The decline in the P/E ratio more than offset earnings growth and this pushed the market cap down.
Explanation:
Market Cap = P/E ratio * Earnings
Market cap is dependent on both the P/E ratio and Earnings as shown by the formula and as shown on the graph, the P/E ratio kept on decreasing which means that for the Market Cap to decrease, the downward pull of the P/E ratio must have overshadowed the growth in earnings such that the Market Cap went down instead of up.
For instance, if the earnings were $40 billion and the P/E ratio was 15, Market Cap would be $600 billion.
If earnings increased to $45 billion but P/E ratio decreased to 10, Market Cap would become $450 billion.
