Financial Learning Systems has 2.34 million shares of common stock outstanding and 126,779 shares of preferred stock. ? (The preferred pays annual cash dividends of ?$5.24 a? share, and the common pays annual cash dividends of 21 cents a? share.) Last? year, the company generated net profit? (after taxes) of $6,869,423.??The? company's balance sheet shows total assets of ?$71 ?million, total liabilities of??$26 ?million, and $5 million in preferred stock. The? firm's common stock is currently trading in the market at ?$39.31 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 ?$4.04 and the? P/E ratio stays where it? is? What will happen if EPS drops to ?$1.69 and the? P/E doesn't? change?

c.??What will happen to the price of the stock if EPS rise to ?$4.04 and the? P/E jumps to 21.3 times? earnings?

d.??What will happen if both EPS and the? P/E ratio dropto ?$1.69 and 8.9 times? earnings, respectively?

e.??Comment on the effect that EPS and the? P/E ratio have on the market price of the stock.