Question: 1. Can a firm increase its earnings growth yet not affect the value of its equity?
2. PIE ratios were quite low in 2008- 2012 (about 11- 12 on average), even though interest rates were also very low (with 10-year Treasury yields below 3.5 percent). Explain how this could be.
3. Normal P/E Ratios (Easy) Prepare a schedule that gives the normal trailing and forward P/E ratios for the following levels of the cost of equity capital: 8, 9, 10, 11, 12, 13, 14, 15, and 16 percent.