Botox Facial Care had earnings after taxes of $348,000 in 20X1 with 200,000 shares of stock outstanding. The stock price was $77.80. In 20X2, earnings after taxes increased to $420,000 with the same 200,000 shares outstanding. The stock price was $95.00.

a.Compute earnings per share and the P/E ratio for 20X1. (The P/E ratio equals the stock price divided by earnings per share.)(Do not round intermediate calculations. Round your final answers to 2 decimal places.)

b.Compute earnings per share and the P/E ratio for 20X2.(Do not round intermediate calculations. Round your final answers to 2 decimal places.)

c.Why did the P/E ratio change?(Do not round intemediate calculations. Input your answers as percents rounded to 2 decimal places.)

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