14. Financial Statement Analysis
Ratios: Price-Earnings Ratio (PE Ratio)
Multiple Choice
Multiple ChoiceTougher Company's current year income statement showed an EPS of $1.25 per share. If total common equity totaled $600,000 (40,000 common shares), preferred dividends were $10,000 (10,000 preferred shares), and the market price of common and preferred stock are $25 and $50, respectively, what is the company's P/E ratio?
A
5
B
10
C
20
D
40
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