Date of Award


Degree Type

Master's Essay - Restricted

Degree Name

Master of Business Administration (MBA)


Business Administration


Recently there has been a great deal written about price-earnings ratios. Innumerable statistics appear in periodicals currently supporting both sides of the debate. In support of the theory that the market is too high, it is pointed out by bears that current price-earnings ratios are at a historically high level for prosperous times and, therefore, the downside risk is very great and the upside potential is practically nil. (See the Dow-Jones Industrial Average P/E ratio chart on the next page.) Further evidence to support the bears is presented by using the current bond and stock yield relationship in the light of its historical relationship.1 (A bear is someone who believes that the market will decline.)