A company reported net income of $6 million.During the year the average number of common shares outstanding was 3 million.The price of a share of common stock at the end of the year was $5.There were 400,000 shares of preferred stock outstanding on average and no dividends were declared and the preferred stock is noncumulative.
-Use the information above to answer the following question.The Price/Earnings ratio is approximately:
A) 2.00.
B) 2.50.
C) 2.84.
D) 12.50.

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The Answer of A company reported net income of $6 million.During the year the average number of common shares outstanding was 3 million.The price of a share of common stock at the end of the year was $5.There were 400,000 shares of preferred stock outstanding on average and no dividends were declared and the preferred stock is noncumulative.
-Use the information above to answer the following question.The Price/Earnings ratio is approximately:
A) 2.00.
B) 2.50.
C) 2.84.
D) 12.50.

A Company Reported Net Income of $6 Million