A company reports the following: Net income .................................................................... $562,000 Preferred dividends ...................................................... $50,000 Shares of common stock

Question:

A company reports the following:
Net income .................................................................... $562,000
Preferred dividends ...................................................... $50,000
Shares of common stock outstanding .......................... 80,000
Market price per share of common stock .......................... $32

a. Determine the company’s earnings per share on common stock.
b. Determine the company’s price-earnings ratio. Round to one decimal place.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...

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