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Analyze the data in Exhibit 5, comparing the data for the two companies. Explain why you think the stock prices of the two co
Exhibit 5 The Battle for Value, 2016: FedEx Corp. versus United Parcel Service, Inc. Financial and Market Performance 2014 Fe

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Answer #1

Generally it is observed that EPS is the way to identify prudent decision. Since we can observe that dividend yields are more in UPS and less in FedEx. Due to which EPS is more in FedEx then UPS. Now, the investor will basically look for EPS while purchasing a stock. FedEx is paying less dividend and investing more money into iits operations to generate more profits for the company and generate more returns to its investors by increasing share price. hence it is win win situation for both the parties.Hence the P/E ratio is more of FedEx then UPS

I hope the answer is sufficient. pls let me know if you need any further explaination.

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