As a shareholder of an oil company, you receive its annual report. In the financial statements, the firm reported assets of $9 million, liabilities of $5 million, after-tax earnings of $2 million, and 750,000 outstanding shares of common stock.

a. Calculate the earnings per share of this oil companys common stock.

After-tax earnings per share ______________

b. Assuming that a share of this oil companys common stock has a market value of $40, what is the firms price-earnings ratio?

_______________