ourses/15/modules/67/watchBb Discussion Board....onBMC Case Studieselative ValuationTerminal AccessKNOWLEDGE CHECKAt its peak at the end of 1999, Microsoft had a market cap of$600B. PC sales were booming and most PCs ran on Microsoftsoftware. Revenue was growing 30% per year. The P/E ratiopeaked at nearly 80.0x in 1999. Looking at this chart, whathappened in the subsequent 15 years?ANYWClick toopen/close chartUpdate is ready toTerae LynchFullscreen Go BaThe decline in the P/E ratio more thanoffset earnings growth and this pushedthe market cap down.Earnings grew and this pushed themarket cap up.TEXT BEEarnings declined and this pushed themarket cap down.The decline in the P/E ratio canceledout the decline in earnings and thispushed the market cap up.

The interpretation of the P/E ratio can vary by industry and market conditions. It's important to…

KNOWLEDGE CHECK 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 software. Revenue was growing 30% per year. The P/E ratio. peaked at nearly 80.0x in 1999. Looking at this chart, what happened in the subsequent 15 years? The decline in the P/E ratio more offset earnings growth and this pu the market cap down. Earnings grew and this pushed the market cap up. Earnings declined and this pushed market cap down. The decline in the P/E ratio canceled out the decline in earnings and this pushed the market cap up.

KNOWLEDGE CHECK 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 software. Revenue was growing 30% per year. The P/E ratio. peaked at nearly 80.0x in 1999. Looking at this chart, what happened in the subsequent 15 years? The decline in the P/E ratio more offset earnings growth and this pu the market cap down. Earnings grew and this pushed the market cap up. Earnings declined and this pushed market cap down. The decline in the P/E ratio canceled out the decline in earnings and this pushed the market cap up.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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