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Financial Leaming Systems has 2.9 million shares of common stock outstanding and 169,818 shares of preferred stock. (The preferred pays annual cash dividends of $4.36

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Financial Leaming Systems has 2.9 million shares of common stock outstanding and 169,818 shares of preferred stock. (The preferred pays annual cash dividends of $4.36 a share, and the common pays annual cash dividends of 21 cents a share.) Last year, the company generated net profit (after taxes) of \$6,727,580. The company's balance sheet shows total assets of $86 million, total liabilities of $31 million, and $6 million in preferred stock. The firm's common stock is currently trading in the market at $52.33 a share. a. Given the preceding information, find the EPS, P/E ratio, and book value per share. b. What will happen to the price of the stock if EPS rises to $3.12 and the P/E ratio stays where it is? What will happen if EPS drops to $1.28 and the P/E doesn't change? c. What will happen to the price of the stock if EPS rises to $3.12 and the P/E jumps to 36.4 times earnings? d. What will happen if both EPS and the P/E ratio drop-to $1.28 and 15.3 times earnings, respectively? e. Comment on the effect that EPS and the P/E ratio have on the market price of the stock. a. The firm's EPS is \$ (Round to two decimal places.)

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