Need Help with Number 10

The financial statements of Tennessee Tractor Company are given below. The required rate of return for the Tennessee Tractor Company is 14%. Tennessee Tractor Company Income Statement Sales Cost of goods sold Gross profit Selling and administrative expenses Operating profit Interest expenses Income before tax Tax expense Net income EPS Dividends per share 2003 $8,000,000 5,260,000 2,740,000 1,500,000 1,240,000 140,000 1,100,000 440,000 $660,000 $5.08 $3.05 Balance Sheet Cash Accounts receivable Inventory Total current assets Fixed assets Total assets 2003 $ 200,000 1,200,000 1,840,000 3,240,000 3,200,000 $6,440,000 Accounts payable Bank loan Total current liabilities Bonds payable Total liabilities Common stock(130,000 shares) Retained earnings Total Equity Total liabilities & equity 800,000 600,000 1,400,000 900,000 2,300,000 300,000 3,840,000 4,400,000 $6,440,000 9. What is the ROE ratio for Tennessee Tractor Company for 2003? a. b. c. d. 2.2% 4.3% 7.2% 15.0% none of the above e. 10. What is the P/E ratio for the Tennessee Tractor Company for 2003? a. 7.38 b. 7.96 c. 11.81 d. 12.87 e. none of the above The financial statements of Tennessee Tractor Company are given below. The required rate of return for the Tennessee Tractor Company is 14%. Tennessee Tractor Company Income Statement Sales Cost of goods sold Gross profit Selling and administrative expenses Operating profit Interest expenses Income before tax Tax expense Net income EPS Dividends per share 2003 $8,000,000 5,260,000 2,740,000 1,500,000 1,240,000 140,000 1,100,000 440,000 $660,000 $5.08 $3.05 Balance Sheet Cash Accounts receivable Inventory Total current assets Fixed assets Total assets 2003 $ 200,000 1,200,000 1,840,000 3,240,000 3,200,000 $6,440,000 Accounts payable Bank loan Total current liabilities Bonds payable Total liabilities Common stock(130,000 shares) Retained earnings Total Equity Total liabilities & equity 800,000 600,000 1,400,000 900,000 2,300,000 300,000 3,840,000 4,400,000 $6,440,000 9. What is the ROE ratio for Tennessee Tractor Company for 2003? a. b. c. d. 2.2% 4.3% 7.2% 15.0% none of the above e. 10. What is the P/E ratio for the Tennessee Tractor Company for 2003? a. 7.38 b. 7.96 c. 11.81 d. 12.87 e. none of the above