Rebert Inc. showed the following balances for last year:

	January 1	December 31
Stockholder's equity:
Preferred stock, $100 par, 8%	$4,000,000	$4,000,000
Common Stock, $3 par	$3,000,000	$3,000,000
Additional paid-in capital*	$4,800,000	$4,800,000
Retained Earnings	$4,000,000	$4,250,000
Total stockholder's equity	$15,800,000	$16,050,000

*For common stock only

Rebert's net income for last year was $3,182,000. Assume that the market price per share for Rebert is $51.50

1. Compute the dollar amount of preferred dividends.

2. Compute the number of common stock.

3. Compute earnings per share.

4. Compute the price-earnings ratio.

Part 1
Preferred stock (dollar amount)	$4,000,000
Dividend percentage	8%
Preferred dividends	$320,000	(hint: Multiply the dollar amount by the percentage.)
Part 2
Common stock (dollar amount)	$3,000,000
Par value per share	$3
Number of common shares	1,000,000
Part 3
Net Income	$3,181,000
Preferred dividends	$320,000
Number of common shares	1,000,000
Earnings per share	$2.86
Part 4
Market price per share	$51.50
Earnings per share	$2.86
Price-earnings ratio	$18.01

Answer rating: 100% (QA)

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