$12-10. (Learning Objective 4: Calculate EPS and the price-earnings ratio) The annual report of Salem Cars, Inc., for the year ended December 31, 2021, included the following items (in millions): Preferred stock outstanding, 3%.. Net income........... $ 1,000 $ 700 Average number of shares of common stock outstanding... 500 1. Calculate earnings per share (EPS) and the price-earnings ratio for Salem Cars stock. Round to the nearest cent. The price of a share of the company's stock is $18. 2. How much does the stock market say $1 of Salem Cars' net income is worth?