Why do analysts make the normalized earnings calculation


1. Bellamee Inc has a required rate of return on its assets of 12% and a cost of debt of 6.25%. Its current debt to equity ratio is 1/5. What is the required rate of return on its equity?

2. Describe the construct of exchange rate and how it affects businesses in more than one country.  

3. Why do analysts make the normalized earnings calculation?

4. What is the meaning of a company's price/earnings ratio?

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Financial Management: Why do analysts make the normalized earnings calculation
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