The income statement, statement of retained earnings, and balance sheet for Somerville Company are as follows:

Somerville Company

Income Statement

For the Year Ended December 31, 20X2AmountPercentNet sales$8,281,989100.0%Less: Cost of goods sold(5,383,293)65.0Gross margin$2,898,69635.0Less: Operating expenses(1,323,368)16.0Operating income$1,575,32819.0Less: Interest expense(50,000)0.6Income before taxes$1,525,32818.4Less: Income taxes (40%)*(610,131)7.4Net income$915,19711.0* Includes both state and federal taxes.

Somerville Company

Statement of Retained Earnings

For the Year Ended December 31, 20X2Balance, beginning of period$1,979,155Net income915,197Total$2,894,352Preferred dividends(80,000)Dividends to common stockholders(201,887)Balance, end of period$2,612,465

Somerville Company

Comparative Balance Sheets

At December 31, 20X1 and 20X220X120X2AssetsCurrent assets:Cash$2,875,000$2,580,000Marketable securities800,000700,000Accounts receivable (net)939,776690,000Inventories490,000260,000Other93,00074,261Total current assets$5,197,776$4,304,261Property and equipment:Land$1,575,000$1,067,315Building and equipment (net)1,348,8001,150,000Total long-term assets$2,923,800$2,217,315Total assets$8,121,576$6,521,576

Liabilities and Stockholders' EquityCurrent liabilities:Notes payable, short term$1,170,127$ 543,641Accounts payable298,484101,500Current maturity of long-term debt3,0002,000Accrued payables200,00057,780Total current liabilities$1,671,611$ 704,921Long-term liabilities:Bonds payable, 10%500,000500,000Total liabilities$2,171,611$1,204,921Stockholders' equity:Preferred stock, $25 par, 8%$1,000,000$1,000,000Common stock, $1.50 par337,500337,500Additional paid-in capital*2,000,0002,000,000Retained earnings2,612,4651,979,155Total stockholders' equity$5,949,965$5,316,655Total liabilities and stockholders' equity$8,121,576$6,521,576* For common stock only.

Also, assume that the price per common share for Somerville is $8.10.

Required:

Compute the price-earnings ratio. Round your interim calculation and final answer to two decimal places.