Income Statement

Sales revenue	$90,000
Cost of goods sold	45,000
Gross margin	45,000
Operating expenses	20,000
Net income	$25,000
Number of shares of common stock	10,000
Market price of common stock	$40,000
Dividends per share on common stock	$0.50
Cash provided by operations per share	$4.000

What is the price earnings (PE) ratio for this company?

1. 16 times

2. 20 times

3. 10 times

4. 8 times