.- Consider Bultaco Company and U.S. Honda, Inc., both of which reported earnings of $1,000,000....
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.- Consider Bultaco Company and U.S. Honda, Inc., both of which reported earnings of $1,000,000. Without new projects, both firms will continue to generate earnings of $1,000,000 in perpetuity. Assume that all earnings are paid as dividends and that both firms require a return of 15 percent.
What is the current PE ratio for each company?
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