The Following Table Shows the Price-To-Earnings Ratio for a Stereo

question 102

Essay

The following table shows the Price-to-Earnings ratio for a Stereo equipment manufacturing company between 1998 and 2002. $$\begin{array} { c c } \text { Year } & \text { P/E Ratio } \\\hline 1998 & 12.4 \\1999 & 14.6 \\2000 & 11.1 \\2001 & 8.2 \\2002 & 6.8\end{array}$$
-Determine the percentage change in the P/E ratios from 1998 to 1999.

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Definitions:

Standard Markup Pricing

A pricing technique where the selling price of a product is determined by applying a specified percentage markup to its cost.

Bundle Pricing

A marketing strategy where several products or services are offered for sale as a combined package at a reduced price.

Cost-Plus Pricing

A pricing method where the sale price is set by applying a predetermined markup to the cost per unit of a product.

Experience-Curve Pricing

A pricing strategy that takes into account the reduction in costs and increase in efficiency that occurs as a company gains experience producing a product or service.