The annual report of Classic Cars Inc. for the year ended December 31, 2014, included the following items (in thousands):
Preferred shares outstanding, $4; 5,000 issued...................................... $500
Net income............................................................................................ $990
Number of common shares outstanding................................................ 200
1. Compute earnings per share (EPS) and the price/earnings ratio for Classic Cars' common shares. Round to the nearest cent. The price of a common share of Classic Cars is $77.60.
2. How much does the stock market say $1 of Classic Cars' net income is worth?