P7.9 (similar to) Is Question Help O Financial Learning Systems has 2.8 million shares of common stock outstanding and 118,405 shares of preferred stock. (The preferred pays annual cash dividends of $5.39 a share, and the common pays annual cash dividends of 32 cents a share.) Last year, the company generated net profit (after taxes) of $5,674,846. The company's balance sheet shows total assets of $72 million, total liabilities of $30 million, and $5 million in preferred stock. The firm's common stock is currently trading in the market at $44.43 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 $2.67 and the P/E ratio stays where it is? What will happen if EPS drops to $1.12 and the P/E doesn't change? c. What will happen to the price of the stock if EPS rises to $2.67 and the P/E jumps to 35.6 times earnings? d. What will happen if both EPS and the P/E ratio drop-to $1.12 and 14.5 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.)