1. Question Content Area

   Earnings per Share and Price-Earnings Ratio

   A company reports the following:

   Net income	$565,000
   Preferred dividends	$32,000
   Shares of common stock outstanding	65,000
   Market price per share of common stock	$120.54

   a. Determine the company's earnings per share on common stock. Round your answer to the nearest cent. Use the rounded answer of requirement a for subsequent requirement, if required.

   b. Determine the company's price-earnings ratio. Round to one decimal place.