Question: 1. Tele soft Corp. traded at a price-to-book ratio of0.98 in May 1999 after reporting an ROCE of 52.2 percent. Does the market regard this ROCE as normal, unusually high, or unusually low?
2. Look at the Case valuation of General Electric in the chapter. Why are residual earnings fairly constant for 2000-2004, event hough return on common equity (ROCE) is declining?