Clem Co. reported net income of $6.8625 million. During the year the average number of common shares outstanding was 3.05 million. The price of a share of common stock at the end of the year was $5. There were 420,000 shares of preferred stock outstanding on average and no dividends were declared and the preferred stock is noncumulative. The Price/Earnings Ratio is approximately:

Multiple Choice

• 3.09.

• 11.10.

• 2.22.

• 2.25.