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[The following information applies to the questions displayed below.] Financial information for Forever 18 includes the following selected data (in millions): ($ in millions) 2018

[The following information applies to the questions displayed below.] Financial information for Forever 18 includes the following selected data (in millions):

($ in millions) 2018 2017
Net income $ 210 $ 180
Dividends on preferred stock $ 25 $ 20
Average shares outstanding (in millions) 240 220
Stock price $ 11.52 $ 10.47

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2-a. Calculate the price-earnings ratio in 2017 and 2018. (Enter your Price-earning ratio values to two decimal places. Enter your answers in millions (i.e. 5,550,000 should be entered as 5.55).) ($ in millions) Price-Earnings Ratio 2017 2018 2-b. In which year is the stock priced lower in relation to reported eamings? 2017 2018

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