17. Mozart Music Co. had earnings after taxes of $560,000 in 2008 with 200,000 shares of stock outstanding. The stock price was $58.80. In 2009, earnings after taxes increased to $650,000 with the same 200,000 shares outstanding. The stock price was $78.00.

a. Compute earnings per share and the P/E ratio for 2008. The P/E ratio equals the stock price divided by earnings per share.

b. Compute earnings per share and the P/E ratio for 2009.

c. Give a general explanation of why the P/E changed.