Chapter 16 review problems On January 1, 2015 Galaxy Corp has 40,000 shares of common stock, $10 par issued and outstanding. During 2015, Galaxy reports net income of $350,000 and engages in the following stock related transactions: Feb 1 Issued 3,000 shares of common stock for cash. Mar 5 Issued 5,000 shares of common stock for cash. Mar 10 Paid a $4,000 dividend on preferred stock. May 1 Reacquired 2,000 shares of common stock as treasury stock. July 1 Declared and issued a 25% stock dividend on common stock. November 1 Issued a 2-for-1 stock split, reducing the par value to $5 per share. On December 31, 2015, the market value of Galaxy common stock is $18 per share. a. Calculate the weighted average number of shares of stock that should be used to calculate EPS for the 2015 income statement. b. Compute the basic EPS that would be disclosed by Galaxy. c. Compute the Price/Earnings ratio for Galaxy on December 31, 2015