1. What do you think about the following firms’ returns: Which firm has more debt? Which firm has less debt? Which firm do you like the best as a stockholder? Why? And as a creditor? Why?
ROE (Return on Equity)
| 2002 | 2003 | 2004 | 2005 | |
|---|---|---|---|---|
Firm A Firm B Firm C Firm D |
15 % 15 % 15 % 40 % |
16 % 15 % 14 % 40 % |
18 % 15 % 14 % 40 % |
20 % 15 % 13 % 40 % |
ROCE (Return on Capital Employed)
| 2002 | 2003 | 2004 | 2005 | |
|---|---|---|---|---|
Firm A Firm B Firm C Firm D |
10 % 15 % 20 % 15 % |
8 % 15 % 20 % 15 % |
7 % 15 % 21 % 15 % |
7 % 15 % 21 % |
2. (2 points) Provide a characterization of Peugeot and Essilor. Explain?
| Firm | EPS – earnings per share | DPS – dividend per share | P/E Ratio | Payout ratio | Dividend yield | Price-to-Book Ratio |
|---|---|---|---|---|---|---|
| 2006 | 2007 | 2008 | 2009 | 2010 | 2006 | |
| Essilor | 1,48 | 1,68 | 1,83 | 2,00 | 2,24 | 0,55 |
| Peugeot | 0,78 | 4,76 | 1,20 | - 8,1 | - 3,9 | 1,35 |