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Tpy6a [65]
3 years ago
6

At its peak at the end of 1999, Microsoft had a market cap of $600B. PC sales were booming and most PCs ran on Microsoft softwar

e. Revenue was growing 30% per year. The P/E ratio peaked at nearly 80.Ox in 1999. Looking at this chart, what happened in the subsequent 15 years? A. The decline in the P/E ratio canceled out the decline in earnings and this pushed the market cap up. B. Earnings grew and this pushed the market cap up. C. The decline in the P/E ratio more than offset earnings growth and this pushed the market cap down. D. Earnings declined and this pushed the market cap down.
Business
1 answer:
Slav-nsk [51]3 years ago
6 0

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.

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Question 1 of 10
dolphi86 [110]

Answer:

B. A receipt.

Explanation:

A receipt is normally given to the person after he or she purchased something, in case if the person wants a refund or etc he can use the receipt for evidence to be able to do so.

5 0
2 years ago
Estimate the value of a share of Intel common stock using the residual operating income (ROPI) model as of December 25, 2010; as
wariber [46]

Answer:

Using

F=P(1+i)^n equation

we will have

n=5 years

i=11%=0.11

P=5511 million

F=23424 million

7 0
3 years ago
Assume that a change in government policy results in greater production of both consumer goods and investment goods. We can conc
dolphi86 [110]

Assume that a change in government policy results in greater production of both consumer goods and investment goods. We can conclude that the economy was not employing all of its resources before the policy change.

Explanation:

Policies by government will affect economic growth

Government policies have a major role to play in encouraging (or deterring) economic growth. Economic policies that lead to economic growth include:

Investing in infrastructure:

Infrastructure, such as highways or bridges, is tangible capital available to all. Governments are increasing their capital stock in the country by investing in infrastructure.

Productivity and labor participation strategies :

Promoting a higher rate of labor participation, for example labor participation tax incentives, will lead to even more economic growth.

Policies promoting accumulation of capital and technological advancement:

Savings-enhancing strategies that lead to higher growth and thus capital investments. Strategies that encourage technological innovation, such as research and development tax credits, often lead to increased economic growth.

8 0
4 years ago
The work of _____ on light was not widely regarded at the time because it was the opposite of what Newton (who was already wildl
gtnhenbr [62]

Answer:

Christiaan Huygens

Explanation:

Christiaan Huygens was a Dutch physicist with many credits and inventions some of which is the pendulum clock and production of many telescopes. He is also credited as the father of theoretical physics being the first to make use of formula in physics. His wave theory of light was controversially not widely regarded because of Isaac Newton's earlier theory on corpuscular theory of light.

He published his work on the wave theory of light in the book called Treatise on Light in 1690 which was then seen as the opposite of what Newton (who was already wildly famous) had proposed.

6 0
3 years ago
If there is a market with the below noted market segmentation, what would the four firm market concentration ratio be?
BlackZzzverrR [31]

Answer:

The correct answer is:

90 (b.)

Explanation:

A concentration ratio is the ratio of the combined market shares percentage held by the largest specified number of firms, compared to the given market size. The concentration ratio ranges from 0% to 100%. If the concentration ratio of an industry ranges from 0% to 50%, that industry is said to be perfectly competitive if the top 5 firms have a concentration ratio of 60% or more, oligopoly is said to occur, and if the competition ratio of one company is 100% it shows monopoly.

In our example, the concentration of the largest four market segments are:

35%, 30%, 15% and 10%

Therefore, the four firm market concentration ratio = 35 + 30 + 15 + 10 = 90    

4 0
4 years ago
Read 2 more answers
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