Selected data for Koch Company for 2007 and additional information on industry averages follow.

Industry averages
Earnings per share ... $ 5.20
Price-earnings ratio .... 9.50
Return on equity ... 11.20%
Required
a. Calculate and compare Koch Company's ratios with the industry averages.
b. Discuss factors you would consider in deciding whether to invest in thecompany.

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Earnings (net income) Preferred stock (19,800 shares at$50 par, 496) Common stock (45,000 shares at S1 par, market value $56) Paid-in capital in excess of par value Common Retained earnings S 289,000 S 990,000 45,000 720,000 843,750 2,598,750 Less: Treasury stock Preferred (1,800 shares) Common (1,800 shares) Total stockholders' equity S81,000 36,000 117,000 $2,481,750