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Question : QUESTION 12 The balance sheets at the

QUESTION 12

The balance sheets at the end of each of the first two years of operations indicate the following:

2006

2005

Total current assets

$600,000

$560,000

Total investments

60,000

40,000

Total property, plant, and equipment

900,000

700,000

Total current liabilities

150,000

80,000

Total long-term liabilities

350,000

250,000

Preferred 9% stock, $100 par

100,000

100,000

Common stock, $10 par

600,000

600,000

Paid-in capital in excess of par-common stock

60,000

60,000

Retained earnings

325,000

210,000

If net income is $115,000 and interest expense is $30,000 for 2006, and the market price is $30, What is the price-earnings ratio on common stock for 2006. (round to one decimal point)?

17.0

12.1

12.4

15.9

2 points 

Solution
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Accounting 9 Months Ago 156 Views
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