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The balance sheets at the end of each of the first two years of operations indicate the following: 2017 2016 Total current assets $600,000 $560,000

The balance sheets at the end of each of the first two years of operations indicate the following:

2017 2016
Total current assets $600,000 $560,000
Total investments 60,000 40,000
Total property, plant, and equipment 900,000 700,000
Total current liabilities 125,000 80,000
Total long-term liabilities 350,000 250,000
Preferred 9% stock, $100 par 100,000 100,000
Common stock, $10 par 600,000 600,000
Paid-in capital in excess of par--common stock 60,000 60,000
Retained earnings 325,000 210,000

Based on the above information, if net income is $130,000 and interest expense is $40,000 for 2017, and the market price is $40, what is the price-earnings ratio on common stock (round to one decimal place)?

a.17.3

b.19.8

c.18.4

d.14.9

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