Why would the comparables give a good estimate, Accounting Basics

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Why would the comparables give a good estimate

Problem

Look up P/E and P/B ratios for Entergy (ticker symbol ETR), using Yahoo! Finance or another Internet source. Calculate the same ratios for the following potential comparables: American Electric Power (AEP), CenterPoint Energy (CNP), and Southern Company (SO). Set out the ratios in the same format as Table 4.1. Are the ratios for these electric companies tightly grouped or scattered? If you didn't know Entergy's stock price, would the comparables give a good estimate?

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