Apple shares are now selling for $115 per share.The P/E ratio based on current earnings is 13.77 and the P/E ratio based on expected earnings is 12.29.The expected growth rate in Apples earnings must be [blank].

Question

Quizplus · Accepted Answer

The expected growth rate in Apple's earnings can be calculated using the P/E ratio based on current earnings and the P/E ratio based on expected earnings. The formula to calculate the expected growth rate is: [(P/E based on current earnings) / (P/E based on expected earnings) - 1] * 100. Plugging in the values: [(13.77 / 12.29) - 1] * 100 = 12.1%.

Apple Shares Are Now Selling for $115 Per Share