Writer’s choice

Please respond to the following questions with informative information. 1. You can’t eat an accrualKevin and Sarah, thanks for joining in so far by tackling this topic.Class, I once had a boss that said “you can’t eat an accrual.” What do you think this means?2. A price-to-earnings ratio is the ratio of the market price per share to annual earnings per share for a company’s stock (CFI, 2020, para. 1). It is a very important component in a company that has stocks because it measures the payback period for your investment in years. Three economic factors that will drive a firm’s price-earnings ratio in a given period to be higher than that of other firms in the same industry would be 1. Positive future performance, 2. Investors that are willing to pay more for their earnings and 3. Investors with higher expectations. Three factors that will drive a firm’s price-earnings ratio to go down in a given period or decrease over time are 1. Fierce competition, 2. Diminishing growth, 3. Increased systematic risk. (CFI, 2020, para. 4-5).ReferenceCFI. (2020). Price Earnings Ratio – Formula, Examples and Guide to P/E Ratio. Retrieved from https://corporatefinanceinstitute.com/resources/knowledge/valuation/price-earnings-ratio3. Re: Topic 8 DQ 1Investor perspectives, general market rapid change, and cost of debt are three economic factors affecting price earnings ratio (Harder, 2018). As companies reinvest earnings, buying factories and expanding, investors see this as expected future growth and are willing to pay higher prices for shares (Harder, 2018). When interest rates fluctuate, demand for dividend paying stocks mirror that fluctuation and influence what price the investors will pay for cash dividends (Harder, 2018). Investors will consider the higher cost to the firm of debt may have a bad influence on future earnings and this would cause share prices to decline (Harder, 2018). Historical earning for the last 12 months is a safer approach to price earning ratio (McLachlan, 2015). A more relevant approach is to forecast the forward 12 months, including the forecast risk factored in (McLachlan, 2018). ReferenceHarder, D. (2018, Nov.17). What factors might influence a firm’s price earning ratio? Retrieved from https://pocketsense.com/factors-firms-price-earnings-ratio-8788295.htmlMcLachlan, K. [JustOneLap]. (2015, Jul. 11). Valuations: Price earnings (PE) model. [Video file]. Retrieved from https://www.youtube.com/watch?v=iLYa9WIQ85k

Don't use plagiarized sources. Get Your Custom Essay on
Writer’s choice
Just from $13/Page
Order Essay
Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more
Live Chat+1(978) 822-0999EmailWhatsApp