ROE and EPS discussion questions

  Question 1.

You are a research analyst for a publicly traded company, and you’ve been assigned to give a presentation on how a company uses performance metrics in corporate valuation.

Respond to the following in a minimum of 175 words:

· Think about how you would present return on equity (ROE) and earnings per share (EPS) to a group of investors or senior management.

· Explain the use of ROE and EPS in evaluating the value of a company. Include how to calculate ROE and EPS.

· Why is understanding ROE and EPS important to a company’s value?

· Share an example of a company whose ROE and EPS you calculated. What do these results say about the company?

Question 2.

Go to Yahoo Finance. Then, enter the name or stock symbol of a US Fortune 500 Company. What is the company's return on equity? Based on the text, is the business' return on equity good, bad, or indifferent? Refer to the textbook and Credo Links below. Why?

Question 3.

What are some advantages and disadvantages of ROE?