Furniture Showcase reported the following for its fiscal year ended June 30, 2010:

Sales .................$ 530,000

Cost of sales .......300,000

Gross margin ......230,000

Expenses .............113,000

Net income ......$ 117,000

At the beginning of the year, the company had 50,000 shares of common stock outstanding. At the end of the year, there were 40,000 shares outstanding. The market price of the company’s stock at year end was $ 20 per share. The company declared and paid $ 80,000 of dividends near year end.

Calculate earnings per share and the price– earnings ratio for Furniture Showcase.