The annual report of Tri-State Cars, Inc., for the year ended December 31, 2010, included the following

Question:

The annual report of Tri-State Cars, Inc., for the year ended December 31, 2010, included the following items (in millions):
Preferred stock outstanding, 6%........................................ $400
Net income......................................................................... $500
Number of shares of outstanding ............... 100

Requirements
1. Compute earnings per share (EPS) and the price/earnings ratio for Tri-State Cars stock.
Round to the nearest cent. The price of a share of Tri-State Car stock is $57.12.
2. How much does the stock market say $1 of Tri-State Cars net income is worth?

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...